Current tax law allows taxpayers to claim wildfire-related losses that exceed 10 percent of their adjusted gross income, along with those who suffer damages from a handful of situations including natural disasters and theft or vandalism.
But the Republican tax bills floated by both chambers seek to change this.
Both versions of the tax legislation now moving through Congress would take away the deduction for personal losses in wildfires. The House bill would eliminate the casualty loss deduction entirely; the Senate version would retain it only for losses in “federally declared disasters,” and wildfires have hardly ever been so declared.
Damage from 2017's wildfires would not be affected, but starting at the beginning of 2018, damage related to such incidents would not qualify for deductions.
Democrats have complained that these provisions are especially unfair to California, which is more prone to wildfires and earthquakes than most other states. But losses from hurricanes, tornadoes, floods and mudslides would not be deductible either, so the effects would be felt in many red states as well.