Thursday, President Biden signed the Federal Disaster Tax Relief Act, into law which exempts wildfire relief payments from federal income taxes. The legislation also streamlines the process for deducting losses from various natural disasters and includes provisions to exempt taxation on legal fees, emotional distress, lost wages, and other expenses linked to wildfire losses. Taxpayers will now be able to claim refunds for any taxes paid on wildfire settlement funds since 2020 by filing an amended return or claiming the change in the next tax year.