Disaster victims get tax-credit lifeline when income drops

What it does

This bill allows families affected by federally declared disasters to use their income from the previous year instead of the current year when calculating eligibility for the child tax credit and earned income tax credit. This helps disaster-affected workers whose income dropped due to the disaster to still qualify for or receive larger tax credits they would have gotten in a normal year.

Why we flagged it

The bill is a straightforward tax-code amendment providing temporary relief to disaster-affected families by allowing them to use prior-year income for tax-credit calculations. It is a narrow, time-limited relief measure tied to federally declared disasters.

What the text implies

• The bill does not specify an end date for the election; it applies to 'taxable years beginning after December 31, 2024' but does not state when the relief expires, potentially creating ambiguity about whether future disaster years are covered.
• The definition of 'disaster-affected taxpayer' includes both those whose principal place of abode/work is in the zone AND those displaced from their abode, which may create edge cases around temporary relocation or work-from-home arrangements during disaster recovery.
• No explicit coordination mechanism is stated for taxpayers affected by multiple disasters in the same year or consecutive years, potentially creating unintended interactions with the tax code.

Who it affects

Disaster-affected families facing income loss get temporary relief by using prior-year income to maintain tax credit eligibility, directly offsetting financial hardship from the disaster. The benefit is narrowly targeted to those in federally declared disaster zones and is time-limited to the disaster year.

Who stands to gain

• disaster-affected families and workers
• low-to-moderate income households reliant on child tax credit and earned income tax credit

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), Senate Committee on Finance

Where it stands

1 cosponsor: 1 Republicans.

• Dec 11, 2025 — Introduced · Congress.gov: “Introduced in Senate”
• Dec 11, 2025 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

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 6 disclosure filings across 3 quarters, Dec 2025 to Jun 2026. Those filings disclosed $2,555,758 in lobbying spend. A filing names 38 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.

Amy Klobuchar, the sponsor, reported $116,500 in PAC receipts in the 2026 cycle.

• Aicpa Association of International Certified Professional Accountants — $1,550,000 on 1 filing
• National Association of Mutual Insurance Companies — $1,005,758 on 2 filings
• 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.