The Working Families Disaster Tax Relief Act allows people affected by federally declared disasters to use their income from the previous tax year instead of the current year when calculating eligibility for the Earned Income Credit and the Child Tax Credit. This helps disaster-affected families who may have lost income during the disaster year but would qualify for these credits based on their pre-disaster earnings. The bill applies to anyone whose home or workplace during the disaster was in an officially designated disaster zone, as well as those who were displaced from their homes as a result of the disaster. The changes take effect for tax years beginning after December 31, 2024, and do not specify new federal funding since it operates through the existing tax credit system. The bill was introduced in December 2025 with bipartisan support and has been referred to the Senate Finance Committee.
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