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Introduced February 13, 2025 by Bill Cassidy · Last progress February 13, 2025
Creates a refundable tax credit equal to 33% of qualifying National Flood Insurance premiums for a taxpayer's principal residence and sets up an advance-payment program so Treasury can pay that share directly to FEMA on behalf of eligible individuals. The credit phases out for higher-income households based on poverty-line thresholds, is refundable, and is reduced by any advance payments; Treasury must issue rules to coordinate the credit and advance payments. The changes apply to taxable years beginning after enactment.
The bill makes flood insurance more affordable for many by providing a refundable 33% premium credit and optional advance payments to improve cash flow and continuity of coverage, but it leaves significant costs for those in high-risk areas, creates access and administrative hurdles for some, and increases federal spending.
Homeowners in NFIP-participating properties receive a refundable credit equal to 33% of qualifying flood insurance premiums (with an option for up to 33% to be paid in advance to FEMA), lowering out-of-pocket insurance costs and improving year-round cash flow for participating households.
Premium assistance is made automatic and routed through the Treasury to FEMA using tax or other reliable information for those who elect the program, simplifying access and improving timely premium payments and continuity of flood coverage for participating households.
Because the credit is refundable, low- and moderate-income households with little or no income tax liability can receive the full benefit, increasing equity of assistance for financially vulnerable flood-prone households.
Many households—especially those in high-risk flood zones—will still face substantial premium costs because assistance is capped at 33% of premium, leaving coverage potentially unaffordable for numerous at-risk homeowners.
The program increases federal outlays (Treasury payments to FEMA), which could raise overall taxpayer costs or require budget offsets elsewhere if not fully paid for.
Relying on tax return information to determine or advance payments could delay or exclude people without recent filed returns or with complex/irregular filings, reducing timely access for some vulnerable households.