Sponsors (2)
The bill reduces upfront flood-insurance burdens and helps lower-income homeowners smooth premium payments, but does so at meaningful federal cost, with administrative complexity, partial coverage for the poorest households, and some eligibility gaps.
Homeowners with federally-backed flood insurance: up to 33% of annual flood insurance premiums are covered (via refundable credit/advance payment), lowering out-of-pocket renewal costs.
Lower- and moderate-income owners: the credit is phased in for households below 350% of the federal poverty line, targeting greater relief to lower-income and middle-class families.
Program electors (homeowners who opt in): advance payments based on reliable tax or other information smooth cash flow and make it easier to budget for annual premium renewals.
Federal taxpayers: making the credit refundable and providing advance payments increases federal outlays, raising budgetary costs or adding to deficits.
Homeowners/taxpayers who receive the credit: the credited portion of premiums cannot be deducted, which may reduce other tax benefits or shift the value/timing of tax relief.
Taxpayers/federal administration: the program requires IRS rulemaking and coordination with Treasury/FEMA, creating implementation complexity and additional administrative costs for government and compliance burdens for taxpayers.
Based on analysis of 3 sections of legislative text.
Creates a refundable tax credit equal to 33% of qualifying NFIP flood insurance premiums for a principal residence and an advance-pay option, with a poverty-based phaseout.
Introduced February 13, 2025 by Bill Cassidy · Last progress February 13, 2025
Creates a refundable federal tax credit equal to 33% of qualifying National Flood Insurance Program (NFIP) premiums for a taxpayer’s principal residence, with a poverty-based phaseout and rules limiting eligibility for certain filers and dependents. Directs the Treasury to set up an advance-payment option that sends up to 33% of a qualifying individual’s premiums directly to FEMA on the individual’s behalf, and requires coordination between advance payments and the tax credit when taxpayers file returns.