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

This bill creates a refundable personal tax credit for disaster mitigation expenditures on a principal residence. The credit equals 50% of qualified expenses, with a maximum lifetime credit of $25,000 per taxpayer (or $12,500 for married filing separately). The credit phases out for taxpayers with adjusted gross income over $200,000 and is fully phased out at $300,000. For jointly occupied dwellings, total expenditures taken into account by all occupants are capped at $25,000 per calendar year. Dollar amounts are adjusted for inflation after 2025.

Sec. 2, Refundable personal credit for disaster mitigation expenditures: The bill adds new Section 36C to the Internal Revenue Code. Qualified disaster mitigation expenditures include property and services for roof strengthening, water barriers, impact-resistant roofing, gable-end wall bracing, roof-to-wall connections, opening protection, door and garage protection, FEMA wind retrofit guide measures, elevation above flood levels, basement wall sealing, and propane tank protection. Also covered are check valves, flood vents, breakaway walls, stormwater drainage, nature-based flood control, ignition-resistant construction, wall-to-foundation anchors, cripple wall sheathing, chimney anchorage, lateral resisting systems, standby generators, storm shelters or safe rooms meeting ICC-500 or FEMA standards, lightning protection, ignition-resistant exterior elements, water hydration and fire mitigation systems, water capture systems, flood openings, seismic lateral bracing, and automatic shutoff valves. Services include creating vegetation buffers, removing or replacing ignition-prone landscape features, fire maintenance procedures, water and weather data analysis, removing flammable vegetation within 5 feet, natural disaster risk assessment, and smoke inhalation prevention. Also covered are property meeting FORTIFIED designation standards and other hazard mitigation activities identified by the Treasury Secretary in consultation with FEMA. Expenditures paid or reimbursed by any government entity are excluded. The dwelling unit must be the taxpayer's principal residence located in a state or territory that had a federal natural disaster declaration for wildfire, hurricane, windstorm, or flood within the preceding 10 years, or that received FEMA hazard mitigation assistance for such events, or that includes a community disaster resilience zone designated due to such events. Taxpayers must provide documentation of expenditures. No deduction or other credit is allowed for expenditures taken into account under this section, and basis is reduced by the credit amount. The amendments apply to taxable years beginning after December 31, 2024.