Sponsors (2)
The bill reduces upfront flood-insurance burdens and targets credits to lower-income homeowners by advancing up to 33% of premiums, but it increases federal costs and administrative complexity while still leaving many low-income homeowners responsible for unaffordable remaining premiums.
Homeowners with federally-backed flood insurance can receive up to 33% of their flood insurance premium paid in advance, reducing immediate out-of-pocket renewal costs and smoothing annual cash flow for many policyholders.
Low- and moderate-income households receive phased-in credits (with full credit available for households below 350% of the federal poverty line), targeting relief to those with the greatest affordability need.
Coordinating advance payments through the Treasury and FEMA may increase enrollment and continuity in federally-backed flood insurance, reducing gaps in coverage for at-risk properties.
The refundable advance credits increase federal outlays, raising costs for taxpayers and potentially increasing deficits or requiring offsetting revenues or spending cuts.
The program creates administrative and implementation complexity for the IRS, Treasury, and FEMA—requiring new rules, coordination, and operating costs that could burden agencies and impose compliance costs on taxpayers and policyholders.
Capping advance payments at 33% leaves many low-income homeowners unable to afford the remaining premium, so the measure provides only partial affordability relief for the most vulnerable.
Based on analysis of 3 sections of legislative text.
Creates a refundable tax credit of 33% of NFIP flood insurance premiums for principal residences and an optional advance-payment program to cover up to 33% up front, with income phaseouts.
Official title: Amend the Internal Revenue Code of 1986 to provide an advance refundable credit to offset certain flood insurance premiums, and for other purposes.
Introduced February 13, 2025 by Bill Cassidy · Last progress February 13, 2025
Creates a refundable federal tax credit equal to 33% of flood insurance premiums paid or incurred for a taxpayer’s principal residence under the National Flood Insurance Act, with an income-based phaseout and eligibility limits. Establishes an IRS-administered optional advance-payment program that can send up to 33% of eligible premiums directly to FEMA on behalf of electing individuals, and coordinates reconciliation so taxpayers do not double-dip between advance payments and the credit.