The FIREWALL Act creates a new tax credit to help homeowners pay for disaster mitigation improvements to their homes. Taxpayers can claim a refundable credit equal to 50 percent of their disaster mitigation expenses, with a maximum credit of $25,000 per year (adjusted annually for inflation). The credit applies to homeowners whose principal residences are located in states or territories that have experienced Federal natural disaster declarations for wildfires, hurricanes, windstorms, or floods within the past 10 years, or that have been designated as community disaster resilience zones. Eligible improvements include roof reinforcements, water barriers, impact-resistant windows and doors, elevation above flood levels, installation of storm shelters, removal of flammable vegetation, and various other hazard-mitigation measures. The credit begins in 2025, does not apply to expenses funded by government agencies, and prevents taxpayers from claiming both the credit and a deduction for the same improvements.
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