The Facilitating Increased Resilience, Environmental Weatherization And Lowered Liability (FIREWALL) Act
The FIREWALL Act would create a new refundable personal income tax credit (section 36C) aimed at encouraging homeowners to make disaster-resilient improvements to their principal residences. The credit equals 50% of eligible disaster mitigation expenditures paid during a tax year, with a per-year cap of $25,000 per taxpaying individual (half of that cap, $12,500, for married individuals filing a separate return). The credit is phased out at higher adjusted gross incomes (AGI) and is allocated for jointly occupied dwellings in a specific way. Expenditures must be for a “qualified disaster mitigation expenditure” tied to a “qualified dwelling unit” and cannot be reimbursed by government programs. The bill makes detailed provisions on what counts as eligible expenditures, how credits are documented, and how the credit interacts with other tax rules (no double benefit, basis reduction). It applies to taxable years beginning after December 31, 2024, and would adjust for inflation in future years. In short, the bill provides a refundable tax credit to help homeowners fund a broad set of resilience and weatherization improvements, with a significant focus on wind, flood, fire, and other natural-hazard mitigation measures for primary residences in qualifying areas.
Key Points
- 150% refundable credit for disaster mitigation expenditures. The tax credit equals half of qualified disaster mitigation expenditures paid in a taxable year.
- 2Annual cap and phaseout. The credit cannot exceed $25,000 per taxpayer per year (or $12,500 for a married individual filing separately). The credit is reduced is reduced for higher AGI above $200,000 (phaseout proportionally based on AGI).
- 3Qualified dwelling unit and primary residence rules. The dwelling must be a principal residence and located in areas meeting specified disaster/mitigation criteria (recent federal disaster declarations or FEMA hazard mitigation corroboration, or designation as a community disaster resilience zone). The dwelling is the residence of the taxpayer.
- 4Detailed eligible expenditures. A long, explicit list covers structural and safety improvements (roof strength, water barriers, ignition-resistant materials, wind/debris protections, flood mitigation, storm shelters, generators, safe rooms, lightning protection, fire buffers, vegetation management, water and weather data analysis, and more), plus options aligned with FEMA guides (e.g., wind retrofit, IBHS Fortified standards) and other Secretary-approved mitigation activities.
- 5Special treatment for jointly occupied dwellings. For homes occupied by two or more individuals, the program caps total eligible expenditures at $25,000 for the year and requires allocation among occupants based on each person’s share of expenditures.
- 6Documentation and anti-double benefit rules. Taxpayers must provide adequate documentation of eligible expenditures, and expenditures cannot be both deducted or credited twice; the credit reduces the tax basis for the property.
- 7Effective date and indexing. The credit applies to taxable years beginning after December 31, 2024, with inflation adjustments beginning in later years (cost-of-living adjustments to the $25,000 cap and related amounts).