S. 336 — Disaster Mitigation and Tax Parity Act of 2025

This section establishes an exclusion from gross income under Section 139 of the Internal Revenue Code of 1986 for qualified catastrophe mitigation payments received by or paid for the benefit of an individual under a program established by a state (or political subdivision or public instrumentality thereof), joint powers authority, or state-created entity for essential or basic property insurance with state regulatory oversight. (Qualified catastrophe mitigation payments are amounts—other than qualified disaster mitigation payments—paid to property owners solely to improve property and reduce damage from windstorms, earthquakes, floods, or wildfires; such payments do not increase the recipient's basis in the property.) The exclusion applies to taxable years beginning after December 31, 2021, with the Secretary of the Treasury required to allow claims via amended returns.