Disaster Relief Hidden in Tax Code: Quick Cash for Displaced Workers

What it does

This bill allows families affected by federally declared disasters to calculate their child tax credit and earned income tax credit using their income from the previous year instead of the current year. This helps disaster-affected workers whose income dropped due to the disaster—they can claim a larger tax credit based on their pre-disaster earnings, providing immediate financial relief during recovery.

Why we flagged it

The bill is a narrowly tailored tax-code amendment designed to provide temporary relief to workers and families whose income has been disrupted by federally declared disasters. It uses the existing tax-credit machinery to deliver aid.

What the text implies

• The provision applies retroactively to tax years beginning after December 31, 2024, meaning it could cover disasters that occurred in early 2025 and may require amended returns or advance claims.
• Eligibility depends on a presidential major-disaster declaration under the Stafford Act, which means some disaster-affected taxpayers in areas not formally declared may not qualify, creating potential equity gaps.
• The mechanism allows use of prior-year income for both child tax credit (Section 24) and earned income tax credit (Section 32), potentially stacking relief for low-income families with children.
• No sunset date is specified in the text, so the election may remain available indefinitely for any future qualified disaster, creating an open-ended fiscal commitment.

Who it affects

Disaster-affected working families gain direct financial relief by accessing larger tax credits when their current-year income has been disrupted. The provision targets genuine hardship (displaced workers, destroyed businesses) with a straightforward mechanism that puts money back in households during recovery.

Who stands to gain

• working families with children
• low-income workers eligible for earned income tax credit
• disaster-displaced workers

Named in the bill

Internal Revenue Code Section 24 (child tax credit), Internal Revenue Code Section 32 (earned income tax credit), Robert T. Stafford Disaster Relief and Emergency Assistance Act, President (disaster declaration authority), House Committee on Ways and Means

Where it stands

• Dec 11, 2025 — Introduced · Congress.gov: “Introduced in House”
• Dec 11, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

3 lobbying clients named this bill on 5 disclosure filings across 2 quarters, Mar 2026 to Jun 2026. Those filings disclosed $1,669,592 in lobbying spend. A filing names 31 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 61% of bills with at least one filing.

Sara Jacobs, the sponsor, reported $212,000 in PAC receipts in the 2026 cycle.

• Aicpa Association of International Certified Professional Accountants — $1,550,000 on 1 filing
• Zero to Three: National Center for Infants, Toddlers, and Families — $119,592 on 1 filing
• Network — $0 on 3 filings

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.