HR 1093119th CongressIn Committee

Natural Disaster Property Protection Act of 2025

Introduced: Feb 6, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Natural Disaster Property Protection Act of 2025 would raise the dollar threshold for information reporting to the IRS on payments related to qualified natural disaster expenses from $600 to $5,000. The change applies to two common information-reporting provisions: payments in the course of a trade or business (Internal Revenue Code section 6041) and remuneration for services (section 6041A). A “qualified natural disaster expense” is defined as either (1) costs to mitigate risks to real property from natural disasters or extreme weather, or (2) costs to repair real property damaged by such events. The amendments take effect for amounts paid or incurred after the date of enactment. In short, smaller disaster-related payments would not have to be reported to the IRS, reducing administrative burdens for payers and recipients.

Key Points

1Increases reporting threshold: $600 → $5,000 for payments for qualified natural disaster expenses under both 6041 and 6041A.
2What qualifies: A “qualified natural disaster expense” includes (A) mitigation costs to protect real property from disasters or extreme weather, and (B) repair costs for damage to real property caused by disasters or extreme weather.
3Affects two reporting streams: (1) payments in the course of business (6041) and (2) remuneration for services (6041A).
4Effective date: Applies to amounts paid or incurred after enactment.
5Scope of change: Only the information-reporting threshold is changed; it does not alter eligibility for deductions or credits, nor other tax provisions.

Impact Areas

Primary group/area affected- Payers in the course of business and individuals/entities paying for qualified natural disaster expenses (e.g., property owners, property managers, contractors) who would otherwise need to file information returns for many smaller payments.- Recipients of such payments (contractors, service providers) who would be less likely to receive an information return for smaller amounts.Secondary group/area affected- Tax compliance professionals and accounting/accounting departments that prepare information returns (e.g., Form 1099 series) for disaster-related expenses.- The IRS, which processes and matches information returns; the higher threshold could reduce the volume of forms filed.Additional impacts- Administrative burden: Potentially fewer information returns to prepare and file for many small payments associated with disaster mitigation and repair.- Transparency and monitoring: Reduced visibility of smaller disaster-related payments in tax records, which could affect compliance oversight or data gathering on disaster spending.- Behavioral effects: May influence how properties and contractors structure payments to remain under the threshold, though the per-payment threshold remains; large-scale disaster projects may still generate reporting if individual payments exceed the new limit.

Generated by gpt-5-nano on Nov 18, 2025