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119-hr-3975119th CongressWALLET

Tax Fairness for Disaster Victims Act

Sponsored By: Representative Kennedy, Timothy M. [D-NY-26]

Introduced

Summary

Lookback rule for disaster victims' tax credits. This bill would let taxpayers whose principal place of abode was in a federally declared disaster area elect to use the prior year's earned income or prior year's Social Security taxes when calculating the earned income credit and the credit under section 24(d) if the current year's amounts are lower.

Show full summary
  • Families and households in disaster areas would gain an election to substitute prior-year earned income or Social Security taxes when computing the earned income credit and the section 24(d) credit, potentially preserving credit amounts after a disaster.
  • Joint filers would qualify if either spouse lived in the disaster area, and the prior-year amounts used would be the combined sums for both spouses.
  • Tax administration would get a new mathematical or clerical error category for incorrect use of earned income or Social Security taxes under the new lookback rule in section 32(g).

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 0 costs, 1 mixed.

Bigger EITC and child refunds after disasters

If enacted, disaster victims could choose to use last year’s earnings to figure the Earned Income Tax Credit and the refundable child tax credit. You could do this only if your current year earned income or Social Security taxes are lower. Your main home must have been in a federally declared disaster area on the first day of the FEMA incident period. For a joint return, it would apply if either spouse qualifies, and prior‑year amounts are added together. You would make the election when and how the IRS says, for tax years beginning after enactment.

Faster IRS fixes for lookback mistakes

If enacted, the IRS could treat a wrong use of the disaster lookback as a math or clerical error. This would let the IRS correct the mistake faster, and some usual dispute steps could be more limited. It would apply to tax years beginning after enactment.

Sponsors & CoSponsors

Sponsor

Kennedy, Timothy M. [D-NY-26]

NY • D

Cosponsors

  • Rep. Huffman, Jared [D-CA-2]

    CA • D

    Sponsored 6/12/2025

  • Rep. Barragán, Nanette Diaz [D-CA-44]

    CA • D

    Sponsored 6/12/2025

  • Del. Norton, Eleanor Holmes [D-DC-At Large]

    DC • D

    Sponsored 6/12/2025

  • Rep. Neguse, Joe [D-CO-2]

    CO • D

    Sponsored 6/12/2025

  • Rep. Tokuda, Jill N. [D-HI-2]

    HI • D

    Sponsored 6/12/2025

  • Rep. Tlaib, Rashida [D-MI-12]

    MI • D

    Sponsored 6/12/2025

  • Rep. Chu, Judy [D-CA-28]

    CA • D

    Sponsored 6/12/2025

Roll Call Votes

No roll call votes available for this bill.

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