Sponsor
Byron Donalds
Representative · R-FL
Representative · R-FL
The bill lowers the after‑tax cost of flood insurance and gives direct tax relief to eligible homeowners (especially lower/moderate income), but it reduces federal revenue and leaves renters, uninsured owners, and higher‑income filers without benefit.
Homeowners who purchase NFIP or qualifying private flood insurance can deduct those premiums from taxable income, lowering their federal tax liability and making after‑tax cost of flood coverage more consistent across insurers.
Low‑ and moderate‑income homeowners under the AGI thresholds (≤ $200k single, ≤ $400k joint) receive direct tax relief for a disaster‑related expense, improving short‑term financial resilience after floods.
The deduction reduces federal tax revenue, which could increase deficits or require spending cuts or offsets elsewhere if not paid for.
The benefit applies only to people who purchase flood insurance, so renters and uninsured property owners receive no direct tax relief and remain financially vulnerable after floods.
Taxpayers with AGI above the thresholds (>$200k single, >$400k joint) are excluded from the deduction, so higher‑income homeowners do not benefit.
Based on analysis of 2 sections of legislative text.
Creates a new individual deduction for qualified flood insurance premiums, phased out above $200,000 AGI ($400,000 joint).
Official title: To amend the Internal Revenue Code of 1986 to provide an above-the-line deduction for flood insurance premiums.
Introduced July 17, 2025 by Byron Donalds · Last progress July 17, 2025
Creates a new individual income tax deduction for "qualified flood insurance premiums" paid for property the taxpayer owns, with the deduction phased out for higher-income taxpayers (no deduction above $200,000 AGI for single filers and $400,000 for joint filers). The deduction covers specified National Flood Insurance Program (NFIP) premiums, certain NFIP fees and surcharges, and qualifying private flood insurance, and is effective for taxable years beginning after enactment. The bill inserts the new deduction into the Internal Revenue Code, renumbers an existing section to accommodate it, updates cross-references, and adds the deduction to the items used to compute adjusted gross income (AGI).