S 3432 — Working Families Disaster Tax Relief Act

Bill Text

• Introduced Introduced in Senate Current html December 11, 2025

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill allows disaster-affected taxpayers to use their earned income from the preceding taxable year to qualify for the earned income credit and the refundable portion of the child tax credit.

• Section 24(d)

  (4) Election to use prior year income for disaster-affected taxpayers.-- (A) In general.--A disaster-affected taxpayer may elect to apply paragraph (1) by substituting `the preceding taxable year' for `the taxable year' each place such term appears.

  This addition allows disaster-affected taxpayers to substitute the preceding year's income for the current year's income when determining eligibility for the child tax credit.

• Section 24(d)(4)(B)

  (B) Disaster-affected taxpayer.--For purposes of this paragraph, the term `disaster-affected taxpayer' means, with respect to a taxable year-- (i) a taxpayer whose principal place of abode or principal place of work, during any period in the taxable year which is part of the incident period of a qualified disaster, is located in a qualified disaster zone, or (ii) a taxpayer-- (I) whose principal place of abode, during any period in the taxable year which is part of the incident period of a qualified disaster, is located in the qualified disaster area with respect to such qualified disaster, and (II) who is displaced from such principal place of abode during such taxable year as a result of such qualified disaster.

  This defines who qualifies as a disaster-affected taxpayer, allowing those whose lives are disrupted by a qualified disaster to benefit from the tax credit eligibility provisions.

• Section 24(d)(4)(C)

  (C) Definitions.--For purposes of this paragraph-- (i) Qualified disaster.--The term `qualified disaster' means any disaster with respect to which a major disaster has been declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. (ii) Qualified disaster area.--The term `qualified disaster area' means, with respect to any qualified disaster, the area with respect to which the major disaster was declared under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. (iii) Qualified disaster zone.--The term `qualified disaster zone' means the portion of a qualified disaster area determined by the President to warrant individual or individual and public assistance from the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.

  This adds definitions for key terms to clarify the criteria for disaster-affected taxpayers and the scope of applicable disasters.

• Section 32(c)

  (5) Election to use prior year income for disaster-affected taxpayers.--A disaster-affected taxpayer (as defined in section 24(d)(4)(B)) may elect to apply subsection (a)(1) by inserting `preceding' before `taxable year' in such paragraph.

  This allows disaster-affected taxpayers to use prior year's earned income for calculating the earned income credit eligibility, aligning it with the child tax credit provisions.

• The amendments made by this section shall apply to taxable years beginning after December 31, 2024.

  This specifies the effective date for when the new provisions will start to apply.

Action History

1. December 11, 2025

   Introduced in Senate

2. December 11, 2025

   Read twice and referred to the Committee on Finance.

Sponsors

• Amy Klobuchar · Primary
• Bill Cassidy · Cosponsor

Subjects