Sec. 7. Exclusion of amounts received from state-based catastrophe loss mitigation programs
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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: Gross income shall not include any amount received by an individual as a qualified catastrophe mitigation payment under a program established by a State, or a political subdivision or instrumentality thereof, for the purpose of making such payments. 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. Rules similar to the rules of subsection (g)(3) shall apply in the case of this subsection. . Section 139(d) is amended by striking and qualified and inserting , qualified catastrophe mitigation payments, and qualified . Section 139(i) (as redesignated by subsection (a)) is amended by striking or qualified and inserting , qualified catastrophe mitigation payment, or qualified . The amendments made by this section shall apply to taxable years beginning after December 31, 2020.