# The Shelter Act: A Tax Credit for Disaster-Proofing Your Home

The Shelter Act creates a new tax credit that gives homeowners and business owners money back on their taxes when they spend money making their properties more resistant to natural disasters. Think of it as the government helping you pay for improvements that protect your home or business from hurricanes, floods, earthquakes, wildfires, and other disasters.

**Who can use this credit and what qualifies?** If you own a home in an area that has experienced a major disaster in the past five years—or is near such an area—you can claim this credit for disaster-prevention work you've done. The improvements have to be specific types of upgrades, like reinforcing your roof, installing storm shutters, elevating your home above flood levels, installing a backup generator, creating firebreaks around your property, or installing a safe room. The credit covers both the materials and the labor costs for installation. However, if the government already paid for your improvements through disaster relief funds, you can't also claim this credit.

**How much money can you get back?** For individuals, the credit covers 25 percent of what you spend, up to a maximum of $2,500 per year. If you're married and file jointly, that limit doubles to $5,000. For business owners, the credit is also 25 percent of qualifying expenses, with a $5,000 annual cap. However, if you earn more than $100,000 (or $150,000 for joint filers), the credit starts to shrink—it phases out completely once your income reaches $150,000 for individuals or $200,000 for joint filers. For businesses, the credit phases out once average gross receipts exceed $10 million.

**What if you can't use the full credit?** If your tax bill isn't large enough to use the entire credit in one year, you can carry the unused portion forward and use it in the next five years, as long as you have enough tax liability to claim it.

Shelter Act

Salazar, Maria Elvira

Shelter Act This bill allows individual and business taxpayers a new tax credit for 25% of qualified disaster mitigation expenditures. The credit is limited to $2,500 and $5,000 for individual taxpayers and business taxpayers respectively. The bill defines qualified disaster mitigation expenditures to include expenditures to modify or improve a dwelling unit located in an area in which a federal natural disaster declaration has been made within the preceding five-year period.