Sponsors
The bill lets disaster-affected taxpayers use prior-year earnings to boost Child Tax Credit and EITC benefits under a clear presidential-disaster trigger, but shifts relief into the tax-filing system—creating documentation and administrative burdens and delaying cash support for immediate needs.
Low-income families, parents, and displaced workers in Presidentially-declared major disaster areas can elect to use prior-year earned income when calculating the Child Tax Credit and Earned Income Tax Credit, increasing refunds or reducing tax liability.
Creates a clear, predictable eligibility trigger by tying the tax-election to Presidential major disaster declarations, enabling timely, administratively-defined tax relief for affected taxpayers.
Taxpayers must retain documentation proving residence, work location, or displacement during the incident period and may face increased IRS verification, raising compliance costs and complexity for affected households.
Because the benefit is realized when taxes are filed, families may not receive immediate cash assistance after a disaster and could face short-term financial hardship despite larger tax credits later.
Based on analysis of 2 sections of legislative text.
Allows taxpayers affected by a presidentially declared major disaster to elect to use prior-year earned income and MAGI when calculating CTC and EITC.
Allows taxpayers who are affected by a presidentially declared major disaster to elect to use their prior year’s earned income and modified adjusted gross income when determining eligibility and amounts for the Child Tax Credit and the Earned Income Tax Credit. The change applies to taxpayers whose home or main workplace was in the disaster zone during the incident period, or who were displaced from their home during the taxable year, and takes effect for tax years beginning after December 31, 2024.
Introduced December 11, 2025 by Sara Jacobs · Last progress December 11, 2025