If you have been hit with a disaster, there’s good news. A new law extends special tax help for disaster victims, and another change makes more disasters qualify.
Disaster Tax Relief Extended Through 2026
On September 11, 2026, a new law extended special tax rules for people affected by federally declared disasters. These rules were set to expire in 2025. Now they cover disasters that began between December 28, 2019 and December 31, 2026.
Here’s what that means for taxpayers in a qualifying disaster area:
- You can deduct disaster losses over $500.
- The usual 10% limit on casualty losses does not apply, so more of your loss can be deducted.
- You can choose to claim the loss on last year’s tax return, which can mean a faster refund.
Wildfire Payments Are Now Tax-Free
The same law says that money paid to you because of a wildfire generally isn’t taxable income. This includes payments for things like damaged property, extra living costs, lost wages, injuries, and emotional distress. It doesn’t apply to any amount your insurance already covered.
The wildfire must have been part of a federally declared disaster from 2015 through 2026. The key date is when the disaster was declared, not when you got paid. That helps people whose settlements arrive years after the fire.
State-Declared Disasters Now Count Too
Until now, disaster loss deductions mostly required a federal disaster declaration. Starting with the 2026 tax year, a disaster declared by a state can qualify as well. This comes from the One Big Beautiful Bill Act, signed July 4, 2025.
Qualifying events include hurricanes, tornadoes, floods, earthquakes, droughts, and other natural disasters, plus any fire, flood, or explosion. To qualify, both the state’s governor and the U.S. Treasury Secretary must agree the damage is serious enough.
How NSO & Company Can Help
Tax rules like these can be hard to sort out, especially while you’re dealing with the aftermath of a disaster.
That’s where we come in. NSO & Company is a full-service CPA firm in Fishers, Indiana, serving individuals, families, small businesses, and self-employed taxpayers across central Indiana. We can help you work out whether you qualify for disaster-related tax relief, prepare your return, and make sure you’re claiming everything you’re entitled to.
Ready to talk? Call our office at 317-588-3131.
Frequently Asked Questions
Our clients appreciate our fair, transparent pricing — no surprise fees, no confusing invoices. Individual tax returns start at $750, and business returns start at $1,500. If you’d like to talk through your specific situation before committing, a one-hour consultation with a CPA and tax preparer is $250.
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We work with a wide variety of individual and business clients across central Indiana. Our clients range from entrepreneurs and small business owners to business professionals, retired individuals, families, and business corporations of all sizes.
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NSO and Company combines years of experience with personalized service to help individuals and businesses prepare their taxes accurately and on time. We take the time to understand your situation, answer your questions, and look for opportunities to help you maximize your tax savings, while staying compliant and making the process as smooth as possible. Our clients also value our fair pricing and the confidence that comes from working with a trusted local firm.
