“To amend the Internal Revenue Code of 1986 to provide a credit against tax for disaster mitigation expenditures.”
No CRS summary available for this bill.
This section establishes a nonrefundable tax credit under new IRC section 25G for individuals equal to 25% of qualified disaster mitigation expenditures on a qualified dwelling unit, subject to annual limitations of $3,750 ($7,500 for joint returns) and a cumulative limitation of $15,000 per dwelling unit for taxable years after December 31, 2025. The credit phases out for adjusted gross income over $100,000 ($200,000 for joint returns), reduced ratably over the next $50,000 ($100,000 for joint returns), with dollar amounts adjusted for inflation after 2026 using a cost-of-living adjustment based on calendar year 2025. Qualified disaster mitigation expenditures include costs for specified property improvements and installations to mitigate natural hazards, such as strengthening roof attachments and coverings, installing flood vents and check valves, elevating structures above base flood elevation, adding ignition-resistant building components, installing storm shelters or safe rooms, and seismic bracing.
This section establishes a new nonrefundable tax credit under IRC §38(b)(42) equal to 25% of a taxpayer's qualified disaster mitigation expenditures for a place of business, up to $5,000 per taxable year (phased out for taxpayers with average annual gross receipts over the prior three years exceeding $5 million, with both thresholds inflation-adjusted after 2026 using 2025 as the base year). Qualified disaster mitigation expenditures have the same meaning as under IRC §25G(c)(1) (i.e., costs of certain tangible property installed to mitigate risks from earthquakes, floods, hurricanes, or wildfires), except applied to a place of business located in the United States or a U.S. territory that meets one of the following criteria: (1) subject to a federal natural disaster declaration in the prior five years; (2) adjacent to such an area; (3) received FEMA hazard mitigation assistance for a relevant natural disaster in the current or prior five taxable years; or (4) designated as a community disaster resilience zone (i.e., certain high-risk census tracts identified by the President under 42 U.S.C. §5136). The credit applies to taxable years beginning after December 31, 2025, with special rules mirroring IRC §25G(d)-(g) and no double benefit allowed with the §25G residential credit.