S. 1773, the Tax Relief for Victims of Crimes, Scams, and Disasters Act, would reinstate a tax deduction for personal casualty losses that was eliminated by the 2017 Tax Cuts and Jobs Act. The bill affects individuals who suffered losses from disasters, crimes, or scams and would allow them to deduct those losses on their federal tax returns, a benefit that has been unavailable since 2018. The legislation also provides a special window for people who filed taxes during the years 2018-2024 but couldn't claim these deductions at the time—it extends their deadline to file amended returns and claim refunds for any eligible casualty loss deductions they missed. There is no new federal funding required, as this is a tax code change. The deduction would apply retroactively to tax years beginning after December 31, 2017, meaning taxpayers could potentially recover previous overpayments through amended filings.
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