Thousands of survivors of the 2025 Eaton Fire in Altadena, California, have elected to accept an upfront settlement from the utility accused of causing it, forgoing future litigation for a faster payment that could help them rebuild or relocate.
But unless a bill moving through Congress becomes law, that money could be taxed as income, taking big bites out of their payments and possibly disqualifying them from other government benefits.
“There was this terrifying disbelief,” Bree Jensen, communications director for the Eaton Fire Long-Term Recovery Group, said of informing fellow residents about the tax.
Thousands more who are suing the utility face the same prospect, as well as fire survivors in Colorado, Hawaii and Oregon after a tax exemption on wildfire-related compensation expired at the end of 2025.
In recent years, Congress has shielded wildfire settlements from taxes, but legislation to do so was short-lived and a struggle to pass, leaving gaps between laws that risk saddling some survivors with a possible tax burden on their compensation. A bipartisan House bill to extend the tax relief passed out of committee last month, but the timeline for bringing it to a floor vote and when the Senate will take action are unknown, leaving survivors in financial limbo.
“We have to assume we don’t have that money, so we’re making decisions, choosing cheaper materials, forgoing the solar,” said one Altadena homeowner, who spoke on the condition of anonymity because she fears compromising her expected settlement of about $700,000. If that money counts as income, she expects taxes would take 37%.
The homeowner hoped accepting a settlement would get her family home faster, after she, her husband and their four pets spent more than a year hopping between relatives' houses and rentals.
“All we wanted was to rebuild a comfortable house and get out of the situation we were in,” she said, adding their construction costs alone are estimated to reach $1 million.
As survivors watch lawmakers lock horns over the Iran war and the record-long Department of Homeland Security shutdown, some worry extending disaster tax relief will be de-prioritized.
“People have low expectations of anything actually getting done,” said Jenn Kaaoush, a 2021 Marshall Fire survivor and town council member in Superior, Colorado.
Utility equipment is believed to have sparked some of the deadliest and most destructive fires in recent years. Multibillion-dollar settlements have become common after these fires but take years to resolve.
As construction costs soar and insurance becomes more expensive and difficult to secure, compensation from lawsuits has become a critical component of how many households start over.
“It’s the difference between towns getting rebuilt and not getting rebuilt, quite frankly,” said attorney Doug Boxer, who has represented more than 17,000 Californians in cases against utilities and is part of the LA Fire Justice coalition suing Southern California Edison and its parent company, Edison International, on behalf of more than 2,000 clients.
SCE and Edison International have acknowledged their power equipment may have sparked the Eaton Fire, which destroyed 9,000 structures and killed 19 people. The utility last year announced a compensation program for those impacted, promising fast payments based on the value of one’s losses, as well as an additional premium for not joining litigation against the utility.
More than 2,800 households have applied for the compensation program. Thousands more are joining lawsuits against the utility. An investigation into the Eaton Fire's cause is ongoing.
Households can’t afford to lose a chunk of their payments to taxes, said Jensen, whose home also burned. “It sounds like a lot of money, but not in regards to how expensive it is to actually build in the community.”
Payments related to federally declared wildfire disasters from 2015 through 2026 would not count toward taxable income, according to legislation approved unanimously by the House Ways and Means Committee last month. That would apply to payouts received in 2026 and after.
The measure would extend expanded tax relief for property losses from federal disasters through this year, a provision that helped attract bipartisan support from lawmakers representing states vulnerable to hurricanes and other extreme weather.
Florida Rep. Greg Steube — a Republican who championed the 2024 tax relief bill and introduced its successor with fellow Republican Rep. Doug LaMalfa, now deceased, and with Democratic Reps. Mike Thompson and Jimmy Panetta of California — told The Associated Press he expects the legislation to ultimately pass, but he acknowledged “the exact timeline remains uncertain.”
Steube, whose southwest Florida constituents could benefit from the provision deducting personal casualty losses, has vowed to push the law forward.
Two similar bills were introduced in the Senate, but further action has not been taken.
After lobbying for the past and present bills as executive director of the survivor advocacy nonprofit After The Fire, Jennifer Gray Thompson said she believes lawmakers understand the bipartisan nature of disaster tax relief.
“As these disasters come in quick succession, we are going to have to adapt on all levels, and our tax code will have to adapt along with it,” she said.
Still, Gray Thompson said she can't be sure when action will come.
Maui residents face similar challenges as they await payments from a $4 billion settlement with Hawaiian Electric. Only about 180 homes have been rebuilt in Lahaina among 2,200 structures destroyed.
What Lahaina survivors need most is “certainty,” Maui County Mayor Richard Bissen wrote to lawmakers in a letter supporting tax relief.
While the majority of destroyed homes in Superior have been rebuilt, Kaaoush, the town council member, said most survivors are still catching up financially after finding themselves underinsured.
She also worries that her constituents could be knocked off income-qualified government benefits for food, health care or veterans’ support if their wildfire payments count as income.
“This has second- and third-order impacts on their life that will do harm,” Kaaoush said.
Gray Thompson cautioned that while survivors waiting for relief can defer taxes or amend past returns, resolving issues with government programs, such as qualifying for college financial aid, is much harder. “There's no way to undo that,” she said.
Meanwhile, many in Altadena feel they’re continually facing new obstacles to returning home, said another resident who also lost his home and insisted on anonymity because of ongoing litigation.
Being taxed “would just add more pain and suffering for us, really,” he said.
FILE - Firefighters try to protect a structure as the Eaton Fire advances, Jan. 8, 2025 in Altadena, Calif. (AP Photo/Ethan Swope, File)
FILE - A lone home stands among residences leveled by the Eaton Fire in Altadena, Calif., Jan. 21, 2025. (AP Photo/Noah Berger, File)
FILE - An American flag hangs on the gate of a home destroyed by the Eaton Fire in Altadena, Calif., Jan. 10, 2025. (AP Photo/Jae C. Hong, File)
The U.S. Navy's forcible seizure of an Iranian-flagged cargo ship threw doubt on an announcement from President Donald Trump that U.S. negotiators will head to Pakistan on Monday for another round of talks with Iran.
Trump's announcement Sunday had raised hopes of extending a fragile ceasefire set to expire by Wednesday.
Iran’s Foreign Ministry spokesperson Esmail Baghaei on Monday said Tehran did not have plans yet to attend any talks with the United States.
Trump said the U.S. seized the cargo ship that tried to circumvent a naval blockade near the Strait of Hormuz on Sunday, the first such interception since the blockade of Iranian ports began last week.
Iran’s joint military command said Tehran will respond soon and called the U.S. seizure an act of piracy.
The escalating standoff threatened to deepen the energy crisis roiling the global economy and push the two countries toward renewed fighting that has killed at least 3,000 people in Iran, nearly 2,300 in Lebanon, 23 civilians and 15 soldiers in Israel and more than a dozen in Gulf Arab states. Thirteen U.S. service members have also been killed.
Here is the latest:
President Joseph Aoun’s comments hinted Beirut will not accept that Iran negotiates on its behalf as part of U.S.-Iran talks.
Aoun said a Lebanese delegation led by diplomat Simon Karam will lead the next round of talks with Israel, as a 10-day fragile ceasefire between Israel and Hezbollah remains in place. The date for the talks has not been confirmed yet.
“No one will participate with Lebanon in this mission or replace it,” Aoun said in a statement. He said the aim of the negotiations is to halt “hostile actions, end the Israeli occupation of southern areas, and deploy the army up to the internationally recognized southern borders.”
He said Lebanon faces two options: the continuation of the war, or negotiations to end it. Hezbollah has expressed opposition to direct negotiations between Lebanon and Israel. Last week, the Lebanese and Israeli ambassadors to Washington held the first direct talks in decades.
India’s Shipping Ministry said on Monday that the vessel carrying crude oil and 31 seafarers safely crossed of Strait of Hormuz on Saturday, the same day two other Indian vessels had to turn back after reports of Iranian gunfire.
The vessel is expected to arrive at Mumbai on Wednesday, the ministry said. It added that 10 Indian-flagged ships have so far safely crossed the strait.
Oil prices climbed more than 5% while world shares were mixed Monday as a standoff between Iran and the U.S. prevented tankers from using the Strait of Hormuz.
U.S. benchmark crude gained 5.3% to $87.88 a barrel, while Brent crude, the international standard, was up 5.3% at $95.62 a barrel.
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Brazil President Luiz Inácio Lula da Silva said during a visit to Germany it is unacceptable that hunger, illiteracy and a lack of access to electricity remain unresolved for billions of people while trillions are spent on wars.
“We are experiencing a critical moment in global geopolitics, marked by great paradoxes: While astronauts fly to the moon, women and children are being killed indiscriminately in the bombings in the Middle East,” he said Sunday night at the Hannover trade fair, German news agency dpa reported.
Lula called for modern technologies to be used not for wars, but “for a more sustainable and secure world.”
China’s Ministry of Foreign Affairs expressed concern Monday over the U.S. seizure of an Iranian-flagged cargo ship on Sunday.
“We hope all relevant parties will adopt a responsible attitude, abide by the ceasefire agreement, avoid escalating tensions or intensifying contradictions,” spokesperson Guo Jiakun said.
“The Strait of Hormuz is an international waterway, and ensure its unimpeded passage serves the common interests of countries in the region and the international community,” Guo said.
China has called for the resumption of the normal operation of the waterway.
Iran’s military offered an explanation Monday for why it didn’t fight back against U.S. Marines who raided an Iranian vessel in the Gulf of Oman.
The Khatam al-Anbiya Central Headquarters, which oversees operations of Iran’s regular military and its paramilitary Revolutionary Guard, said it held back attacking the Marines because the ship’s crew had family members aboard the Touska.
“Due to the presence of some family members of the ship’s crew, they faced constraints in order to protect their lives and ensure their safety, as they were in danger at every moment,” it said.
However, Iran also has seen much of its navy and airborne assets destroyed in the war.
Khatam al-Anbiya vowed it will take “necessary action against the terrorist U.S. military” in the future, without elaborating.
Iran’s Foreign Ministry spokesperson Esmail Baghaei on Monday said Tehran did not have plans yet to attend any talks with the United States.
He did not rule out Iran attending talks.
Authorities in Islamabad had been making preparations for another round potentially happened there this week.
“So far, while I am here, we have no plans for the next round of negotiations and no decision has been made in this regard,” Baghaei said during a news conference.
Pakistan’s Interior Minister Mohsin Naqvi met U.S. Chargé d’Affaires Natalie Baker at the U.S. Embassy in Islamabad on Monday.
The meeting focused on strengthening Pakistan-U.S. relations and preparations for a second round of talks scheduled to take place in Islamabad this week, Naqvi’s office said.
The statement did not specify when the talks are expected to begin.
Naqvi briefed Baker on security arrangements, saying special measures had been taken to ensure the safety of visiting delegations.
“We have made comprehensive security arrangements for our distinguished guests,” Naqvi said in the statement.
Baker offered an appreciated for Pakistan’s role in easing regional tensions and efforts to facilitate dialogue.
Pakistani authorities on Monday prepared to host a second round of talks between Iran and the United States, despite questions about whether the negotiations will take place.
Pakistan has intensified diplomatic contacts since Sunday with Washington and Tehran to ensure the talks proceed as soon as Tuesday, officials said on the condition of anonymity because they were not authorized to speak to the press.
Prime Minister Shehbaz Sharif spoke by phone late Sunday with Iranian President Masoud Pezeshkian, Sharif’s office said in a statement that did not mention the planned talks.
Authorities began closing key roads and stepping up security in the capital Islamabad over the weekend, particularly around a luxury hotel where the delegations are expected to meet.
Authorities deployed troops at checkpoints, closed tourist sites and instructed major hotels to limit bookings to ensure availability.
Iran on Monday offered a new death toll for the war with Israel and the United States, with its forensic chief saying at least 3,375 people had been killed in the conflict.
The figure came from Abbas Masjedi, the head of Iran’s Legal Medicine Organization.
Masjedi, quoted by the judiciary’s Mizan news agency and other outlets Monday, said only four of the dead remain unidentified.
His comments did not break down casualties among civilians and security forces, instead just saying 2,875 were male and 496 were female.
Masjedi said 383 of the dead were children 18 years old and under.
Masjedi’s figures raised questions about whether or not they included security force members, particularly given the levels of intense bombings targeting military bases and arsenals in the country.
Iran said Monday it hanged two men it accused of setting fire to buildings on behalf of the Israeli intelligence service Mossad.
An Iranian exiled opposition group earlier claimed the men as members and alleged their charges stemmed from events that happened after they already had been detained.
The Mizan news agency of Iran’s judiciary identified the men hanged as Mohammad Masoum Shahi and Hamed Validi.
The Mujahedeen-e-Khalq opposition group identified Shahi as Nima Shahi.
The MEK said the men had been “subjected to interrogation and torture” and convicted over an incident that happened before their detention.
This brings to eight the total number of MEK members executed since the start of the war.
Activists and rights groups say Iran routinely holds closed-door trials in which defendants are unable to challenge the accusations they face.
Hezbollah said it detonated explosives Sunday afternoon in an attack against Israeli forces in southern Lebanon.
The group said in a statement Monday that bombs planted by Hezbollah fighters exploded and destroyed four tanks in a convoy of eight tanks that was passing the village of Deir Siryan.
It was the first claim of an attack by Hezbollah since a 10-day ceasefire went into effect at midnight Thursday.
The Israeli military did not immediately comment.
Tehran says restrictions on Iranian oil come with a price
Iran’s first vice president, Mohammad Reza Aref, says global fuel prices could stabilize only if economic and military pressures on Iranian oil exports end.
“One cannot restrict Iran’s oil exports while expecting free security for others,” Aref wrote on X. “The choice is clear: either a free oil market for all, or the risk of significant costs for everyone.”
Women share a moment as they look at a smartphone at the main gate of the Tehran University as a banner shows portraits of the late Supreme Leader Ayatollah Ali Khamenei, right, and the late revolutionary founder Ayatollah Khomeini in Tehran, Iran, Sunday, April 19, 2026. (AP Photo/Vahid Salemi)
A soldier stands guard on a bridge ahead of second round of negotiations between the U.S. and Iran, in Islamabad, Pakistan, Monday, April 20, 2026. (AP Photo/M.A. Sheikh)
A U.S. Air Force Boeing C-17 Globemaster III transport aircraft prepares to land at Nur Khan airbase, ahead of second round of negotiations between the U.S. and Iran, in Rawalpindi, Pakistan, Monday, April 20, 2026. (AP Photo/Ehsan Shahzad)
Residents of northern Israel living near the Lebanese border protest the security situation, outside the U.S. Embassy in Jerusalem Sunday, April 19, 2026. Hebrew on a sign bearing an image of President Trump reads "Hezbollah thanks Trump." (AP Photo/Mahmoud Illean)
An army soldier stands guard on a roadside to ensure security ahead of the second round of negotiations between the U.S. and Iran, in Islamabad, Pakistan, Monday, April 20, 2026. (AP Photo/Anjum Naveed)
An army soldier, left, walks as police officer drives motorcycle on an empty road ahead of second round of negotiations between the U.S. and Iran, in Islamabad, Pakistan, Monday, April 20, 2026. (AP Photo/Anjum Naveed)
Excavators remove rubble from buildings destroyed in Israeli airstrikes on Thursday as rescuers search for victims in the city of Tyre, southern Lebanon, Saturday, April 18, 2026. (AP Photo/Bilal Hussein)
Displaced people cross a destroyed bridge as they return to their villages, following a ceasefire between Hezbollah and Israel, in Tayr Felsay village, southern Lebanon, Sunday, April 19, 2026. (AP Photo/Bilal Hussein)
