Refundable credit for certain flood insurance coverage

(a) In general Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36B the following new section: 36C. Refundable credit for certain flood insurance coverage (a) In general There shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to 33 percent of the applicable flood insurance premiums paid or incurred by the taxpayer during the taxable year. (b) Limitation based on household income (1) In general The amount of the credit allowed under subsection (a) (determined without regard to this subsection) shall be reduced (but not below zero) by the amount which bears the same ratio to such credit as— (A) the excess (if any) of— (i) the taxpayer's household income for such taxable year, over (ii) an amount equal to 350 percent of the poverty line for a family of the size involved, bears to (B) the phaseout amount. (2) Phaseout amount For purposes of this subsection, the phaseout amount with respect to any taxpayer for any taxable year is the excess of— (A) an amount equal to 435 percent of the poverty line for a family of the size involved, over (B) an amount equal to 350 percent of the poverty line for a family of the size involved. (3) Terms related to income and families Rules similar to the rules of section 36B(d) shall apply for purposes of determining family size, household income, and the poverty line. (c) Applicable flood insurance premiums For purposes of this section, the term applicable flood insurance premiums means premiums paid or incurred to insure the principal residence (within the meaning of section 121) of the taxpayer under the program established under the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.). (d) Other rules (1) No credit for married individuals filing separate returns If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. (2) Denial of credit to dependents No credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins. (e) Reconciliation of credit and advance credit The amount of the credit allowed under this section for any taxable year shall be reduced (but not below zero) by the amount of any advance payment of such credit under section 7527B. (f) Regulations The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations which provide for the coordination of the credit allowed under this section with the program for advance payment of the credit under section 7527B.. (b) Disallowance of deduction Section 280C of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (i) Credit for certain flood insurance coverage No deduction shall be allowed for the portion of the applicable flood insurance premiums (as defined in section 36C) which is equal to the amount of the credit determined for the taxable year under section 36C(a) with respect to such premiums.. (c) Conforming amendments (1) Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by inserting, 36C after 36B. (2) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting, 36C after 36B. (d) Clerical amendment The table of sections for subpart C 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 36B the following new item: Sec. 36C. Refundable credit for certain flood insurance coverage.. (e) Effective date The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after the date of the enactment of this Act.