H.R. 3975

119th CONGRESS 1st Session

To amend the Internal Revenue Code of 1986 to provide a lookback rule in the case of certain federally declared disasters for amounts related to earned income for purposes of determining certain tax credits.

IN THE HOUSE OF REPRESENTATIVES · June 12, 2025 · Sponsor: Mr. Kennedy of New York · Committee: Committee on Ways and Means

H.R. 3975
- SEC. 1. Short title
- SEC. 2. Lookback rule in case of certain federally declared disasters for amounts related to earned income for purposes of determining certain tax credits

SEC. 1. Short title

This Act may be cited as the Tax Fairness for Disaster Victims Act.

(a) In general
- of the Internal Revenue Code of 1986 is amended by inserting after subsection (f) the following new subsection: Section 32
  - (g) Lookback rule for determining amounts related to earned income in case of certain federally declared disasters
    - (1) In general
      - In the case of a qualified individual who elects the application of this subsection (at such time and in such manner as the Secretary may provide)—
        
        if the earned income of the taxpayer for the taxable year which includes the applicable date is less than the earned income of the taxpayer for the preceding taxable year, the credits allowed under this section and section 24(d) shall be determined by substituting—
        
        (i) such earned income for the preceding taxable year, for
        
        (ii) such earned income for the taxable year which includes the applicable date, and
        
        if the social security taxes of the taxpayer for the taxable year which includes the applicable date is less than the social security taxes of the taxpayer for the preceding taxable year, the credit allowed under section 24(d) shall be determined by substituting—
        
        (i) such social security taxes for the preceding taxable year, for
        
        (ii) such social security taxes for the taxable year which includes the applicable date.
    - (2) Definitions
      - For purposes of this subsection—
      - (A) Qualified individual
        
        The term means any individual whose principal place of abode on the applicable date was located in a disaster area with respect to a federally declared disaster. qualified individual
      - (B) Applicable date
        
        The term means, with respect to any federally declared disaster, the first day of the period specified by the Federal Emergency Management Agency as the period during which such disaster occurred. applicable date
      - (C) Federally declared disaster; disaster area
        
        The terms and have the respective meanings given such terms by section 165(i)(5). federally declared disaster``
      - (D) Social security taxes
        
        The term has the meaning given such term by section 24(d)(2). social security taxes
    - (3) Application to joint returns
      - For purposes of paragraph (1), in the case of a joint return—
        
        such paragraph shall apply if either spouse is a qualified individual,
        
        the earned income of the taxpayer for the preceding taxable year shall be the sum of the earned income of each spouse for such preceding taxable year, and
        
        the social security taxes of the taxpayer for the preceding taxable year shall be the sum of the social security taxes of each spouse for such preceding taxable year.
    - (4) Uniform application of election
      - Any election made under paragraph (1) shall apply for all purposes of paragraph (1).
    - (5) No effect on determination of gross income, etc
      - Except as otherwise provided in this subsection, this title shall be applied without regard to any substitution under paragraph (1).
(b) Treatment as mathematical or clerical errors
- Section 6213(g)(2) of such Code is amended by striking at the end of subparagraph (U), by striking the period at the end of subparagraph (V) and inserting , and, and by inserting after subparagraph (V) the following new subparagraph:
  - an incorrect use of earned income or social security taxes pursuant to section 32(g).
(c) Effective date
- The amendments made by this section shall apply to determinations of earned income and social security taxes for taxable years beginning after the date of the enactment of this Act.