Thompson leads congressional delegation in urging tax relief for wildfire survivors
Rep. Mike Thompson, D-Solano, alongside Rep. Doug LaMalfa, R-Richvale and Sens. Dianne Feinstein and Alex Padilla led a delegation of California representatives urging congressional leadership to ensure that any year-end legislative package includes tax relief for wildfire survivors.
The letter issued Thursday is an addendum to House Resolution 7305, introduced by Thompson and LaMalfa in March to ensure that survivors of recent wildfires in the region are not taxed on settlements received through Pacific Gas & Electric's Fire Victims Trust.
The trust was created in 2020 to compensate survivors of the Butte Fire in 2015, Wine Country Fires in 2017 and Camp Fire in 2018.
Thompson and LaMalfa, whose districts are in areas impacted by the Wine Country and Camp fires respectively, introduced the legislation to allow a deduction from gross income for attorney fees and court costs awarded with regards to qualifying wildfire disasters and excludes the amounts paid to compensate victims for wildfire-related losses or damages as part of their gross income. The bill was referred to the House Committee on Ways and Means, but no action has been taken since March 30.
Now, the bill's sponsors — along with California's senators and 22 congressional representatives from both parties — have written a letter to House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell ensuring that tax relief for wildfire survivors is a part of end-of-year legislative packages.
“The Trust began issuing payments to survivors in 2020,” the letter reads in part. “While the current tax code does provide some relief to wildfire survivors in the event of property loss in a disaster area, these provisions do not make sufficiently clear that survivors should not face a tax burden upon receipt of their settlement award. No wildfire survivor should have to pay taxes on their settlement awards. These families and individuals have lost their homes. Survivors should be entitled to the full amount of their award, and should not owe taxes on payments made to lawyers they never hired.”
The letter was co-signed by Reps. Ami Bear, Julia Brownley, Salud Carbajal, Connie Conway, J. Luis Correa, Jim Costa, Mark DeSaulnier, Anna Eshoo, John Garamendi, Jared Huffman, Barbara Lee, Ted Lieu, Alan Lowenthal, Doris Matsui, Tom McClintock, Jay Obernolte, Jimmy Panetta, Katie Porter, Jackie Speier, Mark Takano, Norma Torres and David Valadao.
The full letter can be read at Mikethompson. house.gov/sites/evo-subsites/mikethompson.house. gov/files/evo-media-document/thompson-ca-delegation-leadership-letter.pdf.