This bill allows businesses affected by federally declared disasters since the end of 2023 to transfer unused tax credits to help fund recovery efforts in disaster zones. Specifically, it permits companies operating in qualified disaster areas to convert general business credit carryforwards—tax credits they couldn't use in previous years—into transferrable credits that can be used within two years following a disaster declaration. The bill applies to businesses in areas where the President declared a major disaster under federal law, as well as areas designated by state governors following state-declared disasters. For large corporations filing consolidated tax returns, all affiliated members are treated as a single taxpayer for purposes of this transfer. The changes take effect for tax years ending after the bill's enactment, with a temporary delay in registration requirements until the Treasury Department updates its systems.
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