Sponsors (32)
The bill offers meaningful, targeted tax and housing relief to disaster-affected individuals, charities, and governments—preserving benefits, improving liquidity, and speeding recovery—while increasing federal costs, adding compliance complexity, and risking uneven or temporary distribution of benefits that may favor higher‑income recipients.
Low-income parents and workers in qualified disaster areas can use prior-year earned income to calculate the refundable Child Tax Credit and the EITC for 2025, preserving benefit levels despite disaster-related income drops.
Donors (individuals and corporations) and charities receive enhanced, time-limited tax incentives (including larger individual deductions, a 100% corporate deduction cap for qualifying gifts, and relaxed food-donation tests) that encourage larger, faster charitable contributions to disaster relief.
Individuals in qualified disaster areas gain liquidity and flexibility through retirement-plan relief: penalty-free withdrawals (up to $100,000), temporarily higher plan loan limits and delayed repayments, three-year income spreading for distributions, and a three-year rollover window to restore savings.
All taxpayers: the bill increases federal outlays and reduces tax receipts across multiple provisions (preserved refundable credits, larger charitable deductions, casualty-loss rules, income exclusions, expanded LIHTC), which could increase deficits or require offsetting revenues/cuts.
Individuals who tap retirement relief: penalty-free distributions and expanded plan loans risk depleting retirement accounts, potentially lowering long-term retirement security for affected households.
Taxpayers, employers, nonprofits, and plan administrators face added complexity and compliance costs (opt-in donation paperwork and contemporaneous acknowledgments, detailed rollover/repayment reporting, designation and allocation rules for LIHTC), which could delay relief and raise administrative burdens.
Based on analysis of 8 sections of legislative text.
Provides temporary tax relief and code changes for disaster survivors, charities, retirement withdrawals, casualty losses, and state housing credits tied to qualifying 2025 disasters.
Introduced December 18, 2025 by Judy Chu · Last progress December 18, 2025
Provides a package of temporary tax changes to help people and communities hit by qualifying disasters declared between Jan 1, 2025 and up to 60 days after the bill is enacted. It lets eligible disaster survivors use their prior year earned income to calculate refundable tax credits, eases charitable deduction limits for certain cash donations to relief organizations, allows penalty-free and flexible retirement plan withdrawals and repayments, expands casualty loss and standard deduction relief, tweaks wildfire-compensation tax treatment, and raises state low-income housing tax credit ceilings for 2026–2027 for projects in disaster zones. Most measures apply to disasters and tax years beginning in 2025, include special definitions and time windows tied to the declared incident period, and impose ceilings and documentation or election requirements (for example, a $100,000 per‑disaster retirement distribution limit and contemporaneous written acknowledgments for qualified donations).