Flood Insurance Tax Credit Act of 2018

To amend the Internal Revenue Code of 1986 to allow for a credit against tax for certain flood insurance expenses. 1. Short title This Act may be cited as the Flood Insurance Tax Credit Act of 2018 2. Credit for flood insurance expenses (a) In general Subpart A of part IV of subchapter A of chapter 1 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 (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 (3) Federal contents coverage flood insurance expense The term Federal contents coverage flood insurance expense (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 2019 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 Sec. 25E. Flood insurance expenses. (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 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.