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Allows certain post‑2023 general business credit carryforwards to be transferred as eligible credits for taxpayers with qualified disaster‑area business expenditures within a two‑year window.
Official title: To amend the Internal Revenue Code of 1986 to allow a portion of general business credit carryforwards to be transferred by certain taxpayers affected by federally declared disasters and other incidents.
Introduced February 9, 2026 by W. Greg Steube · Last progress February 9, 2026
The bill gives businesses in newly declared disaster areas faster, clearer access to cash by transferring certain tax credits, but narrows eligibility to post‑2023 declarations, can reduce future tax benefits, and creates new implementation and compliance costs.
Small-business owners and other taxpayers in newly declared disaster areas can convert general business credit carryforwards tied to eligible disaster-related expenditures into immediate cash relief by transferring those credits.
Affiliated/ consolidated business groups can be treated as a single taxpayer for purposes of claiming and transferring these carryforwards, reducing paperwork and administrative complexity for multi-entity businesses.
Businesses have a clear, limited window (the disaster year plus two calendar years) to use eligible expenditures to qualify for transfers, giving firms predictable timing to plan recovery spending.
Taxpayers who transfer carryforwards now may receive smaller tax benefits in future years because they've converted future credits into present cash, reducing long‑term tax relief.
Businesses and the Treasury may face new compliance costs and delays because the IRS and taxpayers must implement rules to determine eligible expenditures and qualified disaster status.
Businesses affected by disasters declared on or before December 31, 2023 are excluded from this relief, leaving some disaster‑impacted firms without access to the transfer option.
Based on analysis of 2 sections of legislative text.
Allows certain businesses and taxpayers in federally declared disaster areas after 2023 to transfer a limited portion of general business credit carryforwards as eligible transferable credits. The transfer is limited to the amount of eligible expenditures paid or incurred for carrying on a trade or business in the qualified disaster area, and those expenditures must be incurred by the end of the second calendar year after the disaster year. The change amends the transferable-credit rules in IRC 6418, defines which carryforwards qualify, treats consolidated groups as one taxpayer, restricts Treasury from requiring new registration for prior-year carryforwards once an online tool is updated, and applies to taxable years ending after enactment.