Disaster Zone Energy Affordability and Investment Act

Transferable disaster tax credits for businesses

If enacted, this bill would let businesses in declared disaster areas transfer some unused general business tax credits. The transferable amount would be the smaller of your applicable credit carryforwards and your eligible disaster-related expenditures for the taxable year. Only carryforwards that were carried to taxable years beginning after December 31, 2023 and that are attributable to the specified credits (the credits described in clauses (ii) and (ix) of section 38(a)(1)) would count. "Eligible expenditures" would mean amounts paid or incurred to carry on a trade or business in a qualified disaster area and paid or incurred on or before the last day of the second calendar year after the calendar year in which the Presidential or State disaster declaration or determination was made. A "qualified disaster area" would include areas with a Presidential major disaster declaration under the Stafford Act made after December 31, 2023 and areas a State governor determines were affected by a State-declared disaster where the incident occurred after December 31, 2023. All members of a consolidated affiliated group would be treated as one taxpayer for these rules. The rule would apply to taxable years ending after the date of enactment. The bill would also bar the Treasury Secretary from requiring online registration for portions of these transferable carryforwards that relate to taxable years beginning with or before the taxable year in which the IRS updates its online registration tool.