S. 3432 — Working Families Disaster Tax Relief Act

This section establishes an election for disaster-affected taxpayers to use earned income from the preceding taxable year, rather than the current taxable year, to determine eligibility for (1) the child tax credit (CTC) by amending IRC §24(d) and (2) the earned income tax credit (EIC) by amending IRC §32(c), effective for taxable years beginning after December 31, 2024. A disaster-affected taxpayer is one whose principal place of abode or principal place of work is located in a qualified disaster zone (i.e., the portion of a qualified disaster area warranting individual assistance under a major disaster declaration by the President pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act) during the disaster's incident period, or whose principal place of abode is in the qualified disaster area and who is displaced as a result. (Thus, disaster victims whose current-year income drops below eligibility thresholds for these refundable credits—CTC up to $2,000 per qualifying child and EIC based on income and family size—may qualify using prior-year income.)