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You Make the Call - Oct. 22, 2026

Published:
By: NATP Staff
A tax professional reviews disaster-related casualty loss deductions on a laptop, highlighting tax relief available to affected homeowners.

Question: Heidy is a single taxpayer under age 65 and not blind, whose home was damaged by severe flooding in a qualified disaster area. After insurance reimbursements, she has a $20,000 unreimbursed personal casualty loss attributable to the disaster and no personal casualty gains. Heidy plans to claim the standard deduction for 2026 rather than itemize. Can she still deduct the casualty loss?

Answer: Yes. The recently enacted Doug LaMalfa Federal Disaster Tax Relief Certainty Act (P.L. 119-108), signed into law on Sept. 11, 2026, allows taxpayers to deduct a qualified net disaster loss even if they claim the standard deduction. The act amended §63(b) specifically to permit the deduction for nonitemizers. It also amended §165(h) to eliminate the normal 10%-of-AGI limitation for these qualified net disaster losses and to apply a $500 reduction for each qualified disaster-related personal casualty loss.

Heidy’s deduction is $19,500 = $20,000 unreimbursed casualty loss - $500 per-casualty reduction.

Because Heidy is single, her 2026 standard deduction is $16,100. She can therefore claim the $16,100 standard deduction plus an additional $19,500 qualified disaster loss deduction, for total deductions of $35,600.

About the author(s)

"NATP team committed to supporting tax professionals with expert insights, industry updates, and resources, shown with green triangle design element representing the organization's brand.

NATP Staff

The NATP team is dedicated to supporting tax professionals with expert insights, industry updates and resources that help them serve their clients with confidence.

Information included in this article is accurate as of the publication date. This post does not reflect tax law changes or IRS guidance that may have occurred after the publishing date.