This bill creates a refundable tax credit covering up to 33 percent of flood insurance premiums for primary residences. The credit phases out for higher-income households and includes an advance payment option so homeowners can receive the benefit before filing taxes.
Latest Action
Read twice and referred to the Committee on Finance.
AI Summary
Plain-English explanation of this bill
This bill creates a refundable tax credit covering up to 33 percent of flood insurance premiums for primary residences. The credit phases out for higher-income households and includes an advance payment option so homeowners can receive the benefit before filing taxes.
Last updated: 1/5/2026
Official Summary
Congressional Research Service summary
<p><strong>Flood Insurance Affordability Tax Credit Act</strong></p><p>This bill establishes a new refundable tax credit for up to 33% of the flood insurance premiums paid (or incurred) under the National Flood Insurance Program to insure a principal residence. The bill also requires the Internal Revenue Service (IRS) to establish a program for paying the tax credit in advance.</p><p>Under the bill, the tax credit for flood insurance premiums may be reduced depending on the taxpayer’s household income in relation to the federal poverty line (FPL). The tax credit begins to phase out once a taxpayer’s household income is 350% of the FPL and is completely phased out once a taxpayer’s household income reaches 435% of the FPL. (Other limitations may apply.)</p><p>Further, the tax credit for flood premiums may not be claimed by a married taxpayer who files a separate federal income tax return or a taxpayer who may be claimed as a dependent.</p><p>Finally, the bill requires the IRS to establish a program that allows a taxpayer to receive the allowable tax credit amount for flood insurance premiums (based on tax return information for the most recent tax year available) in advance.</p>
Key Points
Main provisions of the bill
Creates 33 percent tax credit for flood insurance premiums
Applies to National Flood Insurance Program policies
Refundable credit available to lower-income households
Phases out between 350 and 435 percent of poverty line
Allows advance payment of the tax credit
How This Impacts Americans
Potential effects on citizens and communities
Homeowners in flood-prone areas would get significant help paying rising flood insurance premiums, which have increased dramatically under NFIP reforms. The income limits target relief to working and middle-class families who may struggle with insurance costs.
Policy Areas
Primary Policy Area
Taxation
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
586, 119th Congress (2025). "Flood Insurance Affordability Tax Credit Act". Source: Voter's Right Platform. https://votersright.org/bills/118-s-586