Sponsors (2)
The bill encourages household and small-business disaster resilience by subsidizing mitigation work through targeted tax credits, but its nonrefundable design, dollar caps, complex eligibility rules, and fiscal cost limit reach and create administrative and budgetary trade-offs.
Homeowners of eligible properties can claim a 25% tax credit (up to $3,750 per year; $7,500 for joint filers) for qualifying mitigation costs — including labor and inspection — and may carry unused credits forward up to 5 years, reducing net out-of-pocket cost for resilience upgrades.
Small businesses in declared or qualifying disaster areas can receive a 25% credit on qualified mitigation investments (capped at $5,000 annually), concentrating assistance on smaller firms through a receipts-based phaseout.
Households and businesses that install eligible mitigation measures (e.g., elevating utilities, storm shelters, wildfire-resistant roofs, hazard-proofing) lower future disaster risk and are likely to reduce public disaster response and recovery costs over time.
Low- and moderate-income households and taxpayers with little or no income tax liability receive limited or no immediate benefit because the credit is nonrefundable and phases out by AGI, reducing support for vulnerable homeowners.
The dollar caps on credits ($3,750/$7,500 for homeowners; $5,000 for businesses) may be too small to cover many meaningful mitigation projects, limiting practical value for properties that need larger investments.
Excluding expenditures paid or reimbursed by federal, state, or local grants prevents stacking the credit with public assistance, reducing overall support for homeowners who rely on government programs.
Based on analysis of 3 sections of legislative text.
Introduced December 16, 2025 by Michael F. Bennet · Last progress December 16, 2025
Creates two new federal tax credits to help pay for disaster mitigation upgrades. Individuals get a nonrefundable credit equal to 25% of qualifying mitigation expenses (with per-taxpayer and per-dwelling caps, income phaseouts, documentation, and a five-year carryforward). Businesses get a similar 25% credit with a lower annual cap and a size-based phaseout; expenditures already subsidized by government programs are excluded. Both credits apply only to qualifying dwellings or places of business located in areas with recent FEMA hazard mitigation activity, a recent federal disaster declaration, adjacency to such areas, or designation as a community disaster resilience zone. The changes apply to tax years beginning after December 31, 2025.