Disaster Mitigation and Tax Parity Act of 2023

This bill amends the tax code to exclude certain payments received by property owners from state-run disaster mitigation programs from taxable income. It directly affects homeowners who receive funds from state or state-regulated programs to make property improvements (like reinforcing roofs or fire-resistant landscaping) specifically designed to reduce damage from windstorms, earthquakes, or wildfires. The key provision creates a new tax exclusion for "qualified catastrophe mitigation payments" made for these sole purposes, meaning such payments won't be counted as income. The change applies to taxable years beginning after 2020, with an option for retroactive tax filings to claim the exclusion.