Sponsors (4)
The bill provides targeted federal tax credits to lower the upfront cost of household and business disaster‑mitigation investments and improve local resilience, but those benefits are constrained by nonrefundable rules, caps and eligibility phaseouts and impose administrative and fiscal costs that limit reach and immediacy.
Homeowners and businesses in designated disaster‑prone locations can claim a 25% federal tax credit for qualifying mitigation expenses (homeowner caps: up to $3,750 per taxpayer / $7,500 joint; business cap: up to $5,000), directly lowering federal tax liability and reducing the upfront cost of resilience investments.
Homeowners can include labor and required inspection costs in the credit calculation, reducing out‑of‑pocket installation and compliance expenses for making mitigation improvements.
Unused credits may be carried forward for up to 5 years, letting taxpayers who lack sufficient immediate tax liability realize the benefit in later years.
Because the credit is nonrefundable, low‑income homeowners and businesses with little or no federal tax liability may be unable to use the credit fully, so the policy may not reach many of the most financially vulnerable property owners.
Caps and phaseouts (homeowner caps, $5,000 business cap, AGI and receipts‑based phaseouts) limit benefits for owners with larger mitigation costs and for mid‑sized firms, leaving substantial mitigation expenses uncompensated for many recipients.
Expenditures reimbursed by government grants are excluded from the credit, reducing the benefit for homeowners and businesses that already receive federal or state mitigation funding.
Based on analysis of 3 sections of legislative text.
Creates 25% nonrefundable tax credits for qualifying disaster-mitigation expenses for homes and businesses with annual caps, phaseouts, and documentation rules.
Introduced December 16, 2025 by Maria Elvira Salazar · Last progress December 16, 2025
Creates two nonrefundable tax credits to encourage disaster-mitigation work: a 25% individual credit for qualified mitigation expenses on qualifying dwelling units and a 25% business credit for qualified mitigation expenses at qualifying business locations. Each credit has annual caps, phaseouts tied to income or business receipts, documentation and inspection requirements, and rules preventing double-claiming. Both credits apply to tax years beginning after December 31, 2025. Eligible measures are defined and limited by hazard-specific rules tied to State or Tribal mitigation plans; the Treasury (with FEMA consult) may publish region-specific lists of ineligible expenditures. Unused individual credits may carry forward for up to five years subject to annual limits; similar recordkeeping and conformity rules apply for the business credit.