Disaster Zone Energy Affordability and Investment Act

Transferable disaster tax credits for businesses

This bill would let businesses in declared disaster areas convert part of certain business tax credit carryforwards into transferable tax credits. They would be able to convert up to the smaller of two amounts: applicable general business credit carryforwards or eligible disaster-area expenditures made in the taxable year. Applicable carryforwards would be amounts carried to taxable years beginning after December 31, 2023 and tied to specified business credits. Eligible expenditures would be amounts paid or incurred to carry out a trade or business in a qualified disaster area and must be paid or incurred on or before the last day of the second calendar year following the calendar year of the disaster declaration or governor determination. The bill would treat all members of a consolidated affiliated group as one taxpayer, apply to taxable years ending after enactment, and provide a temporary exception to registration rules until the IRS updates its online tool.