Section 1. Short title
This Act may be cited as the Disaster Mitigation and Tax Parity Act of 2021.
(a) In general
Section 139 of the Internal Revenue Code of 1986 is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection:
(1) In general
Gross income shall not include any amount received by an individual as a qualified catastrophe mitigation payment under a program established by— for the purpose of making such payments.
(A) a State,
(B) a political subdivision or instrumentality thereof, or
(C) an entity established under State charter,
(2) Qualified catastrophe mitigation payment
For purposes of this section, the term qualified catastrophe mitigation payment means any amount which is received by an individual to make improvements to such individual’s residence for the sole purpose of reducing the damage that would be done to such residence by a windstorm, earthquake, or wildfire.
(3) No increase in basis
Rules similar to the rules of subsection (g)(3) shall apply in the case of this subsection.
(1) Section 139(d) is amended by striking and qualified and inserting, qualified catastrophe mitigation payments, and qualified.
(2) Section 139(i) (as redesignated by subsection (a)) is amended by striking or qualified and inserting, qualified catastrophe mitigation payment, or qualified.
(c) Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2021.