Lafayette Reporter

Senator John Kennedy of Louisiana recently addressed the Senate, discussing a new tax law that could benefit residents affected by natural disasters. The Federal Disaster Tax Relief Act, passed in December 2024, introduces changes to how taxpayers can claim deductions for uninsured losses due to federally declared disasters.

Kennedy emphasized the significance of this change for his constituents, stating, "I realize, Mr. President of the Senate, that you would probably prefer to be condemned to hearing O.J. jokes for the rest of eternity than to hear me talk about federal income tax filing, but it is important for Americans and my people back in Louisiana because we have a new deduction for people who have uninsured losses from natural disasters."

The act allows individuals with uninsured property damage exceeding $500 from events like Hurricanes Laura, Delta, Ida, and Francine to deduct these amounts from their income taxes on a dollar-for-dollar basis. Kennedy clarified this provision: "It is called the Federal Disaster Tax Relief Act. What it does is the following: It changes the law. It now says that if you are a victim of a natural disaster like a hurricane and you have a loss that is not paid for by your insurance, you can now deduct off your income tax—dollar for dollar—any uninsured property damage in excess of $500."

For those who have already filed their taxes between 2021 and 2023 without claiming this deduction, Kennedy advised filing an amended return: "I know folks are thinking, well, I already filed my income taxes for 2021 and 2022 and 2023. You can file an amended return. It is very simple to do."

The legislation applies not only to hurricanes but also includes other federally declared disasters such as tornadoes and wildfires. Most taxpayers will still receive their standard deduction along with any additional deductions claimed under this new provision.