The POWER Act of 2025 provides a tax credit of up to $500 for qualified individuals who purchase emergency generators for their primary residence in areas frequently affected by major disasters.
Wesley Hunt
Representative
TX-38
The POWER Act of 2025 introduces a tax credit for individuals who purchase emergency generators for use in their primary residence. This credit, capped at $500, is available to qualified individuals whose primary residence is in an area declared as a major disaster area at least twice in the last 5 years and who have received individual assistance under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The credit amount is reduced for taxpayers with higher incomes, and it applies to generators purchased within 2 years of the Act's enactment. The bill specifies that disasters declared for public health purposes are not covered.
POWER Act Offers Up to $500 Tax Credit for Emergency Generators in Frequent Disaster Zones
The POWER Act of 2025 is looking to give some folks a hand in keeping the lights on during emergencies. Section 2 introduces a new federal tax credit, specifically for homeowners buying emergency generators. The maximum credit you could get is $500, aimed at helping people prepare for power outages after major disasters.
Who Gets a Break on Backup Power?
Not everyone qualifies for this generator credit. To be eligible, your main home needs to be located in an area that's been officially declared a 'major disaster area' at least twice in the past five years. On top of that, you must have personally received individual assistance under the Stafford Act for one of those disasters. Think hurricanes, floods, or wildfires – the bill specifically excludes disasters declared solely for public health reasons, like a pandemic.
How Much Cash Back, and Who Misses Out?
The credit is capped at $500 per household. However, it starts phasing out if your income is higher. For single filers, the $500 credit begins to shrink once your modified adjusted gross income (MAGI) goes over $150,000. For joint filers, that threshold is $300,000. For every $25,000 your income is above these limits, the credit drops by $100. So, higher earners might get a reduced credit or none at all. Also, this isn't a permanent offer; the credit only applies to generators purchased within two years after this bill becomes law.
The Real-World Juice: What Does This Mean?
For people living in areas repeatedly hit by natural disasters, this credit could make buying a generator a bit more affordable, helping them stay safe and functional during power outages. It's a nod towards personal preparedness. However, that $500 cap might only cover a fraction of the cost of a reliable generator, which can easily run into the thousands. Plus, the strict eligibility rules – needing two disaster declarations and prior individual assistance – mean many people facing potential outages won't qualify. If you live somewhere with fewer declared disasters, or if your income is above the threshold, you're likely footing the whole bill yourself. It's targeted relief, but the target is pretty specific.