Flood Insurance Tax Credit Act of 2018

Summary: Flood Insurance Tax Credit Act of 2018  This bill amends the Internal Revenue Code to allow a tax credit for flood insurance expenses. The credit applies to portions of a taxpayer's expenses for federal flood insurance, private flood insurance, and federal contents coverage flood insurance for a principal residence. The amount of the credit is subject to limitations based on the taxpayer's income and must be adjusted for inflation after 2019. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Flood Insurance Tax Credit Act of 
2018''.

SEC. 2. CREDIT FOR FLOOD INSURANCE EXPENSES.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 25D the following new section:

``SEC. 25E. FLOOD INSURANCE EXPENSES.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this subtitle for a taxpayer for a taxable 
year an amount equal to the sum of--
            ``(1) the lesser of--
                    ``(A) the Federal flood insurance expenses of the 
                taxpayer for the taxable year, and
                    ``(B) $1,500, plus
            ``(2) the lesser of--
                    ``(A) 50 percent of the private flood insurance 
                expenses of the taxpayer for the taxable year, and
                    ``(B) $3,000, plus
            ``(3) the lesser of--
                    ``(A) Federal contents coverage flood insurance 
                expenses of the taxpayer for the taxable year, and
                    ``(B) $600.
    ``(b) Phaseout.--
            ``(1) Federal flood insurance expense.--The amount 
        determined under subsection (a)(1) for a taxpayer for a taxable 
        year shall be reduced (but not below zero) by--
                    ``(A) in the case of a joint return, 1.5 percent of 
                so much of the taxpayer's income for such taxable year 
                as exceeds $100,000, and
                    ``(B) in any other case, 3 percent of so much of 
                the taxpayer's income for such taxable year as exceeds 
                $50,000.
            ``(2) Private flood insurance expense.--The amount 
        determined under subsection (a)(2) for a taxpayer for a taxable 
        year shall be reduced (but not below zero) by--
                    ``(A) in the case of a joint return, 3 percent of 
                so much of the taxpayer's income for such taxable year 
                as exceeds $100,000, and
                    ``(B) in any other case, 6 percent of so much of 
                the taxpayer's income for such taxable year as exceeds 
                $50,000.
            ``(3) Federal contents coverage flood insurance expense.--
        The amount determined under subsection (a)(3) for a taxpayer 
        for a taxable year shall be reduced (but not below zero) by--
                    ``(A) in the case of a joint return, 0.6 percent of 
                so much of the taxpayer's income for such taxable year 
                as exceeds $100,000, and
                    ``(B) in any other case, 1.2 percent of so much of 
                the taxpayer's income for such taxable year as exceeds 
                $50,000.
    ``(c) Definition.--For purposes of this section:
            ``(1) Federal flood insurance expense.--The term `Federal 
        flood insurance expense' means the excess of--
                    ``(A) amounts paid or incurred as premiums for 
                flood insurance coverage made available under the 
                National Flood Insurance Act of 1968, over
                    ``(B) Federal contents coverage flood insurance 
                expense.
            ``(2) Private flood insurance expense.--The term `private 
        flood insurance expense' means amounts paid or incurred as 
        premiums for flood insurance coverage other than flood 
        insurance coverage made available under the National Flood 
        Insurance Act of 1968, including such coverage for the contents 
        of a structure.
            ``(3) Federal contents coverage flood insurance expense.--
        The term `Federal contents coverage flood insurance expense' 
        means amounts paid or incurred as premiums for flood insurance 
        coverage made available under the National Flood Insurance Act 
        of 1968 for contents of a structure.
    ``(d) Primary Residence.--Federal flood insurance expenses, private 
flood insurance expenses, and Federal contents coverage flood insurance 
expenses shall only be taken into account to the extent that such 
expenses are paid or incurred for coverage related to the taxpayer's 
principal residence.
    ``(e) Denial of Double Benefit.--No credit shall be allowed under 
subsection (a) for any amount with respect to which a deduction is 
allowed due to subsection (c) or (e) of section 280A.
    ``(f) Inflation Adjustment.--In the case of any taxable year 
beginning in calendar years after 2019, each of the dollar amounts in 
subsections (a) and (b) shall be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, determined by substituting `2018' for `2019' in 
        subparagraph (A)(ii) thereof.
If any amount after adjustment under the preceding sentence is not a 
multiple of $50, such amount shall be rounded to the next lowest 
multiple of $50.''.
    (b) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 25D the 
following new item:

``Sec. 25E. Flood insurance expenses.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2018.