H.R. 4675House117th Congress (2021-2023)In Committee

Disaster Mitigation and Tax Parity Act of 2021

AI-Generated Summary

Updated February 8, 2026 at 5:37 AM UTC

The Disaster Mitigation and Tax Parity Act of 2021 changes the tax code so that individuals who receive payments from state‑run catastrophe loss mitigation programs do not have to count those payments as taxable income. The payments must be used to improve a homeowner’s residence to lessen damage from windstorms, earthquakes, or wildfires. The rule applies to anyone receiving such qualified mitigation payments and takes effect for tax years beginning after December 31, 2021.

Key Provisions

Adds a new subsection to Section 139 that excludes qualified catastrophe mitigation payments from gross income
Defines a qualified payment as money used by an individual to improve their home to reduce damage from windstorm, earthquake, or wildfire
Applies the same basis‑adjustment rules used for charitable contributions to these payments
Updates related subsections of Section 139 to reference the new qualified catastrophe mitigation payment term
Sets the effective date for taxable years starting after December 31, 2021

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

July 22, 2021

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HouseIntro Referral

Introduced in House

July 22, 2021

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

July 22, 2021

Bill Text

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Introduced in HouseIssued July 22, 2021

117th CONGRESS

1st Session

H. R. 4675

IN THE HOUSE OF REPRESENTATIVES

July 22, 2021

Mr. Thompson of California (for himself, Mr. Panetta, Mr. Aguilar, Mr. Garamendi, Mr. Rouzer, Mr. Rice of South Carolina, Ms. Chu, Ms. Sewell, Ms. Sánchez, Mr. Bera, Ms. Speier, Mr. Gomez, and Mr. Calvert) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to exclude from gross income amounts received from State-based catastrophe loss mitigation programs.

Short title

This Act may be cited as the Disaster Mitigation and Tax Parity Act of 2021.

Exclusion of amounts received from state-based catastrophe loss mitigation programs

(a)

In general

Section 139 of the Internal Revenue Code of 1986 is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection:

(h)

State-Based catastrophe loss mitigation programs

(1)

In general

Gross income shall not include any amount received by an individual as a qualified catastrophe mitigation payment under a program established by—

(A)

a State,

(B)

a political subdivision or instrumentality thereof, or

(C)

an entity established under State charter,

for the purpose of making such payments.

(2)

Qualified catastrophe mitigation payment

For purposes of this section, the term qualified catastrophe mitigation payment means any amount which is received by an individual to make improvements to such individual’s residence for the sole purpose of reducing the damage that would be done to such residence by a windstorm, earthquake, or wildfire.

(3)

No increase in basis

Rules similar to the rules of subsection (g)(3) shall apply in the case of this subsection.

(b)

Conforming amendments

(1)

Section 139(d) is amended by striking and qualified and inserting , qualified catastrophe mitigation payments, and qualified.

(2)

Section 139(i) (as redesignated by subsection (a)) is amended by striking or qualified and inserting , qualified catastrophe mitigation payment, or qualified.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2021.