Disaster Mitigation and Tax Parity Act of 2025

This bill creates a tax exclusion for certain disaster mitigation payments received by property owners. It allows individuals to exclude from gross income funds paid by state programs (or approved entities) to make improvements that reduce damage from windstorms, earthquakes, or wildfires. The exclusion applies to payments made for specific property upgrades like storm shutters or fire-resistant roofing. The change takes effect for 2021+ tax years and includes a retroactive option for taxpayers to amend prior returns. It directly affects homeowners participating in qualifying state disaster resilience programs.