Sponsors (2)
The bill helps disaster-affected parents and low-income workers keep or increase EITC and Child Tax Credit benefits by allowing prior-year earned income to be used for calculations and clarifies eligibility, but it requires filing an election (and possible documentation) and modestly increases federal spending.
Low-income taxpayers and working parents in areas with a presidentially declared major disaster can use prior-year earned income to preserve or increase their Earned Income Tax Credit (EITC) when current-year earnings fell because of the disaster.
Parents and families in presidentially declared major disaster areas can use prior-year earned income to qualify for larger Child Tax Credits when their current-year earnings were reduced by the disaster.
Taxpayers and state tax administrators benefit from clearer definitions and a defined relief scope tied to Presidential major disaster declarations, making eligibility and administration easier to determine after disasters.
Disaster-affected taxpayers must file an election (and may need to provide documentation), adding paperwork and compliance burden during recovery.
Taxpayers overall face a modest fiscal cost because allowing prior-year income to increase refundable credits will marginally raise federal outlays.
Based on analysis of 2 sections of legislative text.
Allows taxpayers affected by a presidentially declared major disaster to choose to use their prior year’s earned income when calculating eligibility and credit amounts for the Child Tax Credit and the Earned Income Tax Credit. The change applies to taxpayers whose home or principal workplace was in the disaster area or who were displaced from their home during the disaster year, and takes effect for tax years beginning after December 31, 2024.
Introduced December 11, 2025 by Amy Klobuchar · Last progress December 11, 2025