The SAFE HOME Act would create a new refundable personal income tax credit (Sec. 36C) to encourage homeowners to invest in wildfire mitigation for their primary residences. The credit would be 25 percent of qualified wildfire mitigation expenditures, up to a maximum of $25,000 per tax year, with a phaseout based on adjusted gross income (AGI). The credit is available for expenditures made in taxable years beginning after December 31, 2024, and would apply through December 31, 2032. Eligible costs cover a range of fire-resistant improvements and vegetation/land management designed to reduce wildfire risk, including ignition-resistant roofing and walls, fire-safety upgrades, vegetation clearance, and fire maintenance practices identified by FEMA or the U.S. Forest Service. Expenditures funded by government entities are not eligible. The bill also sets geographic and disaster-related eligibility criteria for the eligible “qualified dwelling unit,” requiring it to be a primary residence in the U.S. or a U.S. territory and located in or near wildfire-affected or hazard-mitigated areas. The program would require documentation to support credits claimed.
Key Points
- 1Refundable credit: Taxpayers may receive the credit as a refund (not just a reduction of tax liability) for qualified wildfire mitigation expenditures, equal to 25 percent of those costs, up to $25,000 per year.
- 2Phaseout by income: The $25,000 maximum is gradually reduced for higher AGI, starting at AGI over $200,000 and phasing to zero as AGI approaches $300,000 (with inflation adjustments in later years).
- 3What counts as a qualified expenditure: Expenditures to improve fire resistance (e.g., ignition-resistant roof, walls, doors, windows, or exterior components), install ignition-resistant or fire-hardened materials, create defensible space via vegetation management, fuel breaks, and even equipment to reduce smoke exposure (like air filtration). It also includes maintenance practices recommended by FEMA/USFS related to fire management.
- 4Eligibility of the dwelling: The home must be a qualified dwelling unit used as the taxpayer’s primary residence, located in the United States or a U.S. territory, and in an area that meets wildfire-related criteria (recent disaster declaration, proximity to such an area, or designation as a community disaster resilience zone). Expenditures that are government-funded are not eligible.
- 5Administration and scope: Taxpayers must provide documentation to the IRS for the claimed expenditures. The credit ends for qualifying expenditures made after December 31, 2032. The proposal adds a new Sec. 36C to the Internal Revenue Code and applies to tax years beginning after 2024.