Sponsors (35)
The bill lets disaster-affected businesses convert certain tax credit carryforwards into near-term cash relief and simplifies treatment for consolidated groups, but it reduces those taxpayers' future tax offsets, creates implementation burdens, and excludes earlier disasters (pre–Dec 31, 2023).
Businesses in qualified disaster areas can transfer general business credit carryforwards tied to eligible disaster-related expenditures to obtain near-term cash relief after a qualifying disaster.
Consolidated corporate groups can be treated as a single taxpayer for these transfers, simplifying claiming and reducing administrative complexity for affiliated businesses.
Businesses get a clear eligibility window — the disaster year plus two calendar years — giving firms a defined timeframe to make recovery spending that qualifies for transferred credits.
Taxpayers (including small businesses) who transfer carryforwards now will have reduced future tax benefits because they forfeit credits that could offset later tax liabilities.
Treasury, state governments, and affected taxpayers will face additional administrative and compliance burdens to implement the new transfer rules and to determine eligible expenditures and qualified disaster status, creating costs and possible delays.
Businesses harmed by disasters declared before Dec. 31, 2023 are excluded from this transfer relief, leaving some disaster-impacted firms ineligible.
Based on analysis of 2 sections of legislative text.
Allows limited transfer of certain general business credit carryforwards for taxpayers with eligible expenditures in qualified disaster areas, subject to a two-year expenditure 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
Allows certain business tax credit carryforwards to be treated as transferable credits for taxpayers that paid eligible business expenses while operating in areas hit by qualifying disasters declared after December 31, 2023. The rule limits the transferable amount to the portion of carryforwards that does not exceed eligible disaster-area expenditures incurred by the taxpayer and sets a deadline for eligible expenditures. Applies to taxable years ending after enactment, treats consolidated groups as one taxpayer for this purpose, preserves existing §6418 definitions except as modified, and prevents the Treasury Secretary from imposing a new registration requirement for carryforwards attributable to earlier taxable years until the agency updates its online registration tool.