Sponsors (2)
Introduced July 16, 2025 by Richard Lynn Scott · Last progress July 16, 2025
The bill extends above‑the‑line tax relief for flood insurance costs (including certain NFIP fees) to lower AGI and help non‑itemizers, trading off reduced federal revenue and increased tax-law complexity while excluding higher‑income taxpayers.
Homeowners who pay flood insurance (including NFIP fees and certain surcharges) can deduct those premiums above the line, lowering their AGI and reducing their federal tax liability.
Taxpayers who do not itemize (including many lower- and middle-income households) benefit because the deduction is taken before itemizing, which can also preserve or increase eligibility for income‑based tax credits and benefits.
All taxpayers face reduced federal revenue because the new above-the-line deduction will lower tax collections, which could raise the deficit or force spending cuts or offsetting revenue increases.
Taxpayers and the IRS will face added complexity from a new code section, AGI ordering rules, and multiple conforming amendments, increasing compliance and administrative costs.
Homeowners with higher incomes (AGI above $200,000 single / $400,000 joint) are excluded from the deduction, so higher‑income policyholders receive no relief under this bill.
Based on analysis of 2 sections of legislative text.
Adds an above-the-line tax deduction for qualified flood insurance premiums paid for property owned by the taxpayer, phased out above $200,000 AGI ($400,000 joint).
Creates a new above-the-line individual income tax deduction for qualified flood insurance premiums paid for property the taxpayer owns. The deduction is available to most taxpayers regardless of whether they itemize, but is phased out for taxpayers with adjusted gross income above $200,000 ($400,000 for joint filers). The new rule takes effect for taxable years beginning after enactment.