Are disaster losses deductible?

What counts as a federally declared disaster

The publication defines a federally declared disaster as one the President determines warrants federal assistance under the Stafford Act, either a major disaster declaration or an emergency declaration. Your property must be in an area eligible for public or individual assistance, and FEMA publishes the list of areas and the declaration numbers, which look like DR-4865 or EM followed by four digits. You enter that number on Form 4684 above line 1. A storm, flood or wildfire that was not declared does not unlock the deduction for personal-use property, although a loss can still offset personal casualty gains.

The ordinary rule: $100 then 10% of AGI

For a federal casualty loss on personal-use property, you start with the smaller of basis or the drop in value, subtract insurance, then take $100 off each event and 10% of adjusted gross income off the total. The publication’s example: a hurricane damaged a main home and furniture in September 2025, with a $50,500 loss on a $71,000 AGI. Subtract $100 for $50,400, subtract $7,100, and the deduction is $43,300. The 10% hurdle is why moderate losses vanish: on $29,500 of AGI, a $1,900 loss after the $100 reduction is smaller than the $2,950 threshold and deducts nothing. You can test either case in the calculator, which shows both treatments side by side.

Qualified disaster losses: $500 and no 10% rule

The publication reserves better terms for qualified disaster losses, an individual’s personal-use casualty or theft loss attributable to specific events. These include a major disaster declared in 2016, Hurricanes Harvey, Irma and Maria, the California wildfires of 2017 and January 2018, a major disaster that occurred in 2018 and before December 21, 2019 and continued no later than January 19, 2020, and a major disaster declared between January 1, 2020 and September 2, 2025 whose incident period began on or after December 28, 2019 and on or before July 4, 2025 and ended no later than August 3, 2025. A disaster declared only because of COVID-19 is excluded. Those dates are the edge of the rule as the 2025 edition prints it, and the publication notes that the One Big Beautiful Bill Act extended the special rules for disasters in that window. A disaster outside the window is an ordinary federally declared disaster with the ordinary $100 and 10% reductions.

For a qualified disaster loss, the $100 reduction becomes $500, the 10% of AGI reduction does not apply, and you can claim the loss even if you take the standard deduction by adding it to the standard deduction on Schedule A, line 16, with the descriptions the publication specifies.

Claim it last year instead

If the disaster was in an area warranting public or individual assistance, you may elect to treat the loss as if it occurred in the preceding year, often producing or increasing a refund. The election must be made by the date six months after the regular due date of the original return for the disaster year. For a calendar-year individual and a 2025 disaster, the publication gives October 15, 2026 as the last day to amend the 2024 return. You use Part I of Section D of the 2024 Form 4684 and, if you already filed, Form 1040-X. You can revoke the election with Part II of Section D within 90 days after the election due date, and you must pay any resulting tax and interest. Unless the loss is a qualified disaster loss, you figure it by the usual rules as if it happened in the earlier year, using the earlier year’s AGI: the publication’s example has a $50,500 loss and $71,000 prior-year AGI producing a $43,300 deduction.

Other disaster rules worth knowing

A home that a state or local government orders torn down or moved because the disaster made it unsafe, with the order issued within 120 days after the area is declared, is treated as a casualty loss. Qualified disaster relief payments for reasonable and necessary personal, family, living, funeral and repair expenses are not income, but you cannot deduct a loss the payment already covered. Federal disaster loans that are cancelled count as reimbursement and reduce the loss. For the full loss arithmetic see how to figure a casualty loss, and for the gain side of insurance payouts see whether a casualty gain is taxable.

Sources

• IRS Publication 547, Casualties, Disasters, and Thefts (2025): Disaster Area Losses; Qualified disaster losses; Deduction Limits. Read November 2, 2026.

Edition read: Publication 547 (2025), for use in preparing 2025 returns. Dollar limits and dates on this page are the figures printed in that edition; legislation enacted after it was published is not reflected, so check the current publication, Form 4684 and its instructions for your tax year. This page summarizes the publication and does not replace it.