Sponsors (2)
The bill makes flood insurance materially more affordable up-front—especially for low- and moderate-income homeowners—by providing a refundable, partially advanceable 33% premium support, but it narrows eligibility to joint filers, reduces some tax deductions, raises privacy and reconciliation burdens, and forgoes federal revenue.
Homeowners with NFIP policies receive up to a 33% reduction in flood insurance costs through a refundable credit and the option for up-front FEMA payments, lowering out-of-pocket costs when buying or renewing coverage.
Lower-income and near-poverty households benefit because the credit is refundable (so it helps those with little or no income tax liability) and eligibility is phased in/up to 350% of poverty with a partial phaseout to 435%, improving affordability for vulnerable households.
Making premium support available earlier in the year and giving the IRS authority to remit payments directly to FEMA helps households afford coverage at purchase time and can reduce delays inherent in post-filing credit delivery.
Single filers and many heads of household are excluded because the credit is available only to married couples filing jointly, leaving unmarried taxpayers without the benefit.
The refundable credit for premiums forgoes federal tax revenue, which could increase deficits or require offsets that affect other taxpayers or spending priorities.
Using recent tax-return data to make advance payments can misestimate current need (for people whose incomes changed), producing under- or over-payments that require reconciliation on tax returns and create administrative burdens for recipients.
Based on analysis of 3 sections of legislative text.
Creates a refundable 33% tax credit for NFIP flood insurance on principal residences and an IRS advance-payment option, with an income-based phaseout and limits to joint filers.
Introduced February 13, 2025 by Bill Cassidy · Last progress February 13, 2025
Provides a refundable tax credit equal to 33% of flood insurance premiums for a taxpayer’s principal residence under the National Flood Insurance Act, with a phased income-based reduction and limits on who may claim it. Creates an IRS-administered advance-payment option to remit up to the 33% subsidy directly to FEMA on behalf of eligible taxpayers and adds tax-code rules to prevent double tax benefit and guide coordination between IRS and FEMA.