Bill > AB389

This bill creates a tax credit for homeowners in high fire hazard areas who make specific fire-resistant home improvements between January 1, 2025, and January 1, 2030. Qualified taxpayers can receive a credit equal to 40% of their qualifying expenses, up to $400 per year and $2,000 cumulatively. Qualified expenses include installing features like a Class A fire-rated roof, enclosed eaves, fire-resistant vents, noncombustible vertical clearance, and exterior wall covering. To be eligible, homeowners must have a primary residence in a high or very high fire hazard severity zone and meet income limits ($250,000 for joint filers or heads of household, $125,000 for other individuals). The bill requires the Franchise Tax Board to analyze and report on the credit's effectiveness, tracking the number of taxpayers who use the credit and the average dollar amount claimed. The primary goal of the credit is to help homeowners in fire-prone areas mitigate potential property damage and reduce life safety risks from wildfires. Any unused credit can be carried forward for up to three additional years, and the credit will automatically expire on December 1, 2030.

Budget and Finance

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