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The bill helps disaster-affected businesses access cash by making certain unused business tax credits transferable and easier to pool across affiliates, but it narrows eligibility to a short post-disaster window, may lower federal receipts, and adds complexity that could favor larger affiliated entities.
Businesses with qualifying disaster-area expenditures (especially small businesses and other taxpayers) can convert unused general business credit carryforwards into transferable credits up to their eligible expenditures, improving immediate liquidity for disaster recovery.
Affiliated groups filing consolidated returns can pool credits and eligible expenditures by being treated as one taxpayer, simplifying recovery planning and credit use for multi-entity businesses.
Taxpayers gain clearer timing rules because the bill defines an explicit eligibility window (through the second calendar year after a disaster declaration), providing certainty for recovery spending decisions.
Allowing credits to be treated as transferable may reduce IRS receipts and could slightly increase the federal deficit or shift tax burdens onto other taxpayers.
The benefit is limited to disasters after Dec 31, 2023 and requires eligible expenditures within a tight two-year window, which may exclude businesses with longer recovery timelines from relief.
Complex definitions and interactions with existing credit rules may increase compliance costs and force taxpayers to seek professional tax help to claim transferability, raising administrative burdens.
Based on analysis of 2 sections of legislative text.
Allows certain business tax credit carryforwards held by taxpayers affected by specified disasters to be treated as transferable credits up to the amount of eligible disaster-related expenditures. The rule applies to carryforwards attributable to particular general business credits for taxable years beginning after Dec 31, 2023, treats consolidated groups as a single taxpayer, and limits Treasury/IRS registration requirements while the agency updates online tools. The change applies to taxable years ending after enactment.
Introduced February 9, 2026 by W. Greg Steube · Last progress February 9, 2026