Sponsors (4)
The bill provides targeted federal tax credits to encourage homeowners and businesses to invest in hazard-mitigation—lowering private costs and boosting community resilience—but the benefits are limited for low‑income taxpayers, constrained by phaseouts and caps, and come with added administrative complexity and federal revenue trade-offs.
Homeowners who install eligible hazard-mitigation improvements can claim a federal tax credit equal to 25% of qualifying costs (up to $3,750 per filer or $7,500 joint), lowering the net cost of protecting their homes.
Small businesses at qualifying disaster-prone locations can claim a 25% credit for eligible mitigation expenses (capped at $5,000 per year), reducing their tax liability and lowering the upfront cost of making facilities more resilient.
The credit encourages investment in disaster mitigation at business locations and community resilience zones, which can reduce future disaster losses and improve local infrastructure resilience.
Because the credit is nonrefundable, low‑income homeowners and businesses with little or no federal tax liability may not be able to use the credit fully, limiting benefits for lower-income and tax-exempt recipients.
Recordkeeping, documentation, eligibility verification, and coordination with FEMA/resilience zone designations increase compliance complexity and administrative workload for taxpayers, businesses, local governments, and federal agencies.
Income-based phaseouts (for homeowners) and gross-receipts phaseouts/caps (for businesses) reduce or eliminate the credit for mid-to-higher-income taxpayers and larger firms, limiting who can access meaningful benefits and adding eligibility complexity.
Based on analysis of 3 sections of legislative text.
Creates 25% tax credits for qualified disaster mitigation spending by individuals and businesses, with caps, phaseouts, and documentation rules.
Official title: To amend the Internal Revenue Code of 1986 to provide a credit against tax for disaster mitigation expenditures.
Introduced December 16, 2025 by Maria Elvira Salazar · Last progress December 16, 2025
Creates two new nonrefundable tax credits to help pay for disaster mitigation work on homes and businesses. Individuals can claim 25% of eligible mitigation expenditures on qualifying dwelling units up to annual and per-dwelling caps, subject to income phaseouts and documentation rules. Businesses can claim a similar 25% credit for qualifying mitigation expenditures at business locations, with its own annual cap and receipts-based phaseout; the bills forbid claiming both credits for the same work. The credits cover labor and required inspections but exclude amounts reimbursed by government programs, require alignment with regional/state hazard mitigation plans, allow Treasury (with FEMA input) to limit ineligible items by region, and apply to tax years beginning after December 31, 2025. Credits are nonrefundable but carry forward unused amounts for a limited period.