08/29/2026
A NEW TAX RULE FOR CASUALTY & DISASTER LOSSES
Starting with the 2026 tax year, the new tax law expands the personal casualty loss deduction.
Previously, personal casualty losses generally had to be connected to a federally declared disaster to qualify. Beginning in 2026, certain losses connected to a state-declared disaster may qualify too. 🏡🔥🌊
That could include losses from events such as wildfires, floods, earthquakes, storms and other qualifying disasters.
But there’s an important catch:
A qualifying loss doesn’t necessarily mean the entire amount is deductible. Insurance and other reimbursements have to be taken into account, and state-declared disaster losses are generally subject to the $100-per-event and 10%-of-adjusted-gross-income limitations.
📅 And timing matters.
This expansion begins with the 2026 tax year. It doesn’t simply change the rules for casualty losses claimed on a 2025 or earlier return.
Every disaster and every taxpayer’s situation can be a little different, so don’t assume a loss does—or doesn’t—qualify based on what you’ve heard online.
If you’ve experienced a casualty or disaster loss and aren’t sure what it means for your taxes, reach out. I’m always happy to talk it through with you. 💗