Summary of H.R. 6645 — Working Families Disaster Tax Relief Act

Purpose

H.R. 6645, introduced December 11, 2025, seeks to provide targeted tax relief to families affected by qualified disasters. It would allow disaster-affected taxpayers to use their preceding tax year’s earned income to determine eligibility for two key refundable credits: the Earned Income Credit (EIC) and the refundable portion of the Child Tax Credit (CTC).

Key Provisions

1) Election to use prior-year income for CTC eligibility

• Amends Section 24(d) of the Internal Revenue Code to create a new election for disaster-affected taxpayers.
• Election language: A disaster-affected taxpayer may substitute “the preceding taxable year” for “the taxable year” wherever applicable in Paragraph (1) of Section 24(d).
• Definitions:
  • Disaster-affected taxpayer: Includes individuals whose principal abode or principal place of work is in a qualified disaster zone during any part of the incident period, or who are displaced from their principal abode in the tax year due to the qualified disaster (with specified conditions).
  • Qualified disaster: Any disaster with a presidential major disaster declaration under the Stafford Act.
  • Qualified disaster area / zone: Areas designated for major disaster declarations or eligible for individual/public assistance.
• Effect: Taxpayers in these circumstances can use the prior year’s income to determine eligibility for the CTC (and its refundable portion) rather than the current year.

2) Election to use prior-year income for EITC eligibility

• Adds a new subsection (5) to Section 32(c), enabling disaster-affected taxpayers to apply the same prior-year income election for EITC.
• The election requires inserting “preceding” before “taxable year” in the relevant paragraph.

3) Effective date

• The amendments apply to taxable years beginning after December 31, 2024.

Affected Parties

• Disaster-affected taxpayers: Individuals who meet the defined criteria (displaced or living/working in a qualifying disaster zone) and who elect to use prior-year income for EITC and/or CTC eligibility.
• Families with children: Beneficiaries of the refundable portion of the Child Tax Credit, who may now qualify based on prior-year earnings in disaster situations.
• Taxpayers in qualified disaster areas: Regions designated under the Stafford Act and specific disaster zones identified by the President.

Procedural and Timeline Aspects

• Status: Introduced in the House and referred to the Committee on Ways and Means (as of December 11, 2025).
• Legislative process: Standard introduction and referral; potential committee consideration and floor action if advancing.
• Retroactive element: The provisions reference taxable years beginning after December 31, 2024, creating a potential retroactive applicability to some disaster scenarios already in effect.

Practical Impact (What Changes)

• Provides administrative simplicity and fairness for disaster-affected families by allowing use of prior-year income to qualify for two major refundable credits.
• Recognizes disruption to earnings and housing caused by disasters, which can affect eligibility calculations under current-year income rules.
• Could increase eligibility rates for EITC and CTC for eligible households in the aftermath of qualified disasters.