The Facilitating Increased Resilience, Environmental Weatherization And Lowered Liability (FIREWALL) Act

This bill creates a refundable personal tax credit for individuals who make disaster mitigation improvements to their homes. The credit equals 50% of qualified expenditures, up to a maximum of $25,000 per dwelling unit per year, with a phaseout for taxpayers with adjusted gross income over $200,000. The credit applies to taxable years beginning after December 31, 2024.

Sec. 2, Refundable personal credit for disaster mitigation expenditures: This section adds a new section 36C to the Internal Revenue Code allowing a credit of 50% of qualified disaster mitigation expenditures. The maximum credit is $25,000 per taxpayer per year (half for married filing separately), reduced by credits claimed in prior years. The credit phases out for taxpayers with adjusted gross income over $200,000, completely phasing out at $300,000. For jointly occupied dwellings, total expenditures taken into account by all occupants cannot exceed $25,000 per calendar year. Dollar amounts are adjusted for inflation after 2025.

Qualified disaster mitigation expenditures include a wide range of improvements such as strengthening roof attachments, creating water barriers, installing impact-resistant roofing, bracing walls, reinforcing roof-to-wall connections, protecting openings from debris, elevating structures above flood levels, installing check valves, flood vents, stormwater systems, ignition-resistant construction, standby generators, storm shelters, lightning protection, fire mitigation systems, water conservation systems, seismic bracing, automatic shutoff valves, and smoke/carbon monoxide detectors. Also included are services like creating vegetation buffers, fire maintenance, water and weather data analysis, risk assessment, and smoke prevention equipment. Expenditures must relate to a qualified dwelling unit that is the taxpayer's principal residence located in a state or territory that has had a federal natural disaster declaration, received FEMA hazard mitigation assistance, or been designated a community disaster resilience zone within the preceding 10 years due to wildfire, hurricane, windstorm, or flood. Expenditures paid or reimbursed by insurance or government entities are excluded. Taxpayers must document their expenditures, and no double benefit is allowed, no deduction or other credit for the same expenditures, and the property's basis is reduced by the credit amount.