H.R. 3975

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3975 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 3975

To amend the Internal Revenue Code of 1986 to provide a lookback rule 
in the case of certain federally declared disasters for amounts related 
to earned income for purposes of determining certain tax credits.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

June 12, 2025

Mr. Kennedy of New York (for himself, Mr. Huffman, Ms. Barragan, Ms. 
Norton, Mr. Neguse, Ms. Tokuda, Ms. Tlaib, and Ms. Chu) introduced the 
following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to provide a lookback rule 
in the case of certain federally declared disasters for amounts related 
to earned income for purposes of determining certain tax credits.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Tax Fairness for Disaster Victims 
Act''.

SEC. 2. LOOKBACK RULE IN CASE OF CERTAIN FEDERALLY DECLARED DISASTERS 
FOR AMOUNTS RELATED TO EARNED INCOME FOR PURPOSES OF 
DETERMINING CERTAIN TAX CREDITS.

(a) In General.--Section 32 of the Internal Revenue Code of 1986 is 
amended by inserting after subsection (f) the following new subsection:
``(g) Lookback Rule for Determining Amounts Related to Earned 
Income in Case of Certain Federally Declared Disasters.--
``(1) In general.--In the case of a qualified individual 
who elects the application of this subsection (at such time and 
in such manner as the Secretary may provide)--
``(A) if the earned income of the taxpayer for the 
taxable year which includes the applicable date is less 
than the earned income of the taxpayer for the 
preceding taxable year, the credits allowed under this 
section and section 24(d) shall be determined by 
substituting--
``(i) such earned income for the preceding 
taxable year, for
``(ii) such earned income for the taxable 
year which includes the applicable date, and
``(B) if the social security taxes of the taxpayer 
for the taxable year which includes the applicable date 
is less than the social security taxes of the taxpayer 
for the preceding taxable year, the credit allowed 
under section 24(d) shall be determined by 
substituting--
``(i) such social security taxes for the 
preceding taxable year, for
``(ii) such social security taxes for the 
taxable year which includes the applicable 
date.
``(2) Definitions.--For purposes of this subsection--
``(A) Qualified individual.--The term `qualified 
individual' means any individual whose principal place 
of abode on the applicable date was located in a 
disaster area with respect to a federally declared 
disaster.
``(B) Applicable date.--The term `applicable date' 
means, with respect to any federally declared disaster, 
the first day of the period specified by the Federal 
Emergency Management Agency as the period during which 
such disaster occurred.
``(C) Federally declared disaster; disaster area.--
The terms `federally declared disaster' and `disaster' 
have the respective meanings given such terms by 
section 165(i)(5).
``(D) Social security taxes.--The term `social 
security taxes' has the meaning given such term by 
section 24(d)(2).
``(3) Application to joint returns.--For purposes of 
paragraph (1), in the case of a joint return--
``(A) such paragraph shall apply if either spouse 
is a qualified individual,
``(B) the earned income of the taxpayer for the 
preceding taxable year shall be the sum of the earned 
income of each spouse for such preceding taxable year, 
and
``(C) the social security taxes of the taxpayer for 
the preceding taxable year shall be the sum of the 
social security taxes of each spouse for such preceding 
taxable year.
``(4) Uniform application of election.--Any election made 
under paragraph (1) shall apply for all purposes of paragraph 
(1).
``(5) No effect on determination of gross income, etc.--
Except as otherwise provided in this subsection, this title 
shall be applied without regard to any substitution under 
paragraph (1).''.
(b) Treatment as Mathematical or Clerical Errors.--Section 
6213(g)(2) of such Code is amended by striking ``and'' at the end of 
subparagraph (U), by striking the period at the end of subparagraph (V) 
and inserting ``, and'', and by inserting after subparagraph (V) the 
following new subparagraph:
``(W) an incorrect use of earned income or social 
security taxes pursuant to section 32(g).''.
(c) Effective Date.--The amendments made by this section shall 
apply to determinations of earned income and social security taxes for 
taxable years beginning after the date of the enactment of this Act.
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