Working Families Disaster Tax Relief Act
- Bill Number
- H.R. 6645
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-12-11: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-01-07T20:06:13Z
AI-Generated Summary
Purpose of the Legislation
The "Working Families Disaster Tax Relief Act" (H.R. 6645) aims to provide tax relief to individuals and families affected by major disasters by allowing them to use income from the previous tax year to qualify for certain tax credits. This helps maintain financial support for low- and moderate-income households that might otherwise lose eligibility due to disaster-related income disruptions.
Key Provisions
- Election for Prior Year Income Use: Eligible taxpayers can choose to base their eligibility for the refundable portion of the Child Tax Credit (CTC) and the Earned Income Credit (EIC) on earned income from the prior tax year instead of the current one. The CTC provides up to a certain amount per qualifying child (partially refundable if it exceeds tax owed), while the EIC is a refundable credit for low- to moderate-income workers.
- Definition of Disaster-Affected Taxpayer: This includes individuals whose main home or workplace is in a "qualified disaster zone" during the disaster's incident period, or those displaced from their home in a "qualified disaster area" due to the event.
- Qualified Disaster Definitions:
- A "qualified disaster" is any event where the President declares a major disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (a federal law that provides aid after events like hurricanes or floods).
- A "qualified disaster area" is the region covered by the presidential declaration.
- A "qualified disaster zone" is the specific part of that area eligible for individual or public assistance from the federal government.
- Effective Date: Applies to tax years starting after December 31, 2024.
Significant Changes to Existing Law
- Amends Section 24(d) of the Internal Revenue Code (IRC) to add a new election option for the CTC's refundable portion, replacing references to the current tax year with the prior year for qualifying taxpayers.
- Adds a new paragraph to Section 32(c) of the IRC for the EIC, allowing a similar election by inserting "preceding" before "taxable year."
- These changes introduce a new flexibility not previously available, linking tax relief directly to presidential disaster declarations under the Stafford Act, without altering the core eligibility rules for the credits.
Potential Impacts
- On Citizens: Low- and moderate-income families in disaster areas could receive continued refundable tax credits (effectively cash payments) despite temporary job loss or income reduction, helping with recovery costs like housing or childcare. This targets working families with children but may exclude those without prior-year income.
- On Government Agencies: The Internal Revenue Service (IRS) will need to verify elections and definitions tied to disaster declarations, potentially increasing administrative workload during peak disaster periods. The Treasury Department may see slightly higher refund payouts, but this supports broader disaster relief goals.
- On International Relations: No direct impact, as the bill focuses on domestic tax policy.
Main Stakeholders Affected
- Primary Beneficiaries: Disaster-affected individuals and families, particularly low-income workers with children in declared disaster areas (e.g., victims of hurricanes, wildfires, or floods).
- Government Entities: IRS (for processing claims), Treasury Department (for credit administration), and the Federal Emergency Management Agency (FEMA, indirectly via Stafford Act ties for disaster definitions).
- Others: Tax preparation services and advocacy groups for low-income families, who may assist with elections.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens integration between tax law and disaster relief statutes by referencing the Stafford Act, ensuring consistency in federal aid. It avoids retroactive changes, applying only prospectively, which reduces legal challenges related to due process.
- Constitutional: Falls within Congress's authority under Article I to levy taxes and provide for the general welfare, without raising separation-of-powers issues since it builds on existing presidential disaster powers.
- Political: Offers targeted, temporary relief to vulnerable populations without broad spending increases, potentially appealing across party lines in disaster-prone regions; however, it could spark debate on the scope of tax code exceptions for specific events.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2025-12-11: Referred to the House Committee on Ways and Means.
- 2025-12-11: Introduced in House
- 2025-12-11: Introduced in House
Bill Versions
- Working Families Disaster Tax Relief Act — issued 2025-12-11 — PDF (4 pages)