POWER Act Offers $500 Generator Tax Credit, But Only for Homeowners Hit by Multiple Disasters

The POWER Act of 2025 (Preventing Outages With Electricity Reinforcement Act) is rolling out a new, temporary tax credit aimed at helping homeowners buy emergency generators. If you qualify, you can get a credit of up to $500 on your taxes for the cost of a generator purchased after the law is enacted. This isn’t a permanent fixture, though—the credit expires for generators bought more than two years after the law takes effect.

The Fine Print on Eligibility: Twice Bitten, Once Helped

Before you start shopping for a generator, know that this credit is highly specific. It’s not for general preparedness; it’s targeted relief for people who have already been through the wringer. To qualify, your main home must be located in an area that has experienced at least two federally declared major disasters (excluding public health emergencies) in the last five years. On top of that, you must have personally received individual assistance under the Stafford Act for one of those disasters. Essentially, you need a documented history of getting rocked by natural disasters and needing federal help to even be considered for this modest tax break.

Income Caps and the $500 Question

Even if you meet the strict disaster criteria, your income could reduce or eliminate the credit. This credit starts phasing out for joint filers with a modified adjusted gross income (MAGI) over $300,000, and for single filers with MAGI over $150,000. For every $25,000 your income exceeds those limits, the maximum $500 credit is reduced by $100. For most people aged 25–45 juggling rising costs, a $500 credit—which may not even cover half the cost of a reliable generator—is a welcome incentive, but it’s a highly complex hoop to jump through for a relatively small benefit. For those who need serious backup power, the benefit might feel more like a token gesture than meaningful relief.

Real-World Impact: Who Gets the Power?

This provision is designed to boost resilience, which is smart policy. If you live in a hurricane zone or a wildfire-prone area that loses power frequently, having a generator means your family can stay safe and your food won't spoil. The idea is that if more individual homes are prepared, the less strain there is on public resources during the next big storm. However, the restrictive rules mean that if you live in a place that has only had one major disaster in the last five years, or if you were hit twice but didn't personally apply for or receive individual Stafford Act assistance, you're out of luck. Likewise, if you’re a family making over $350,000 and living in a disaster zone, you’ll likely see the credit disappear completely. The bill focuses its support on a very specific, previously impacted, middle-income bracket, leaving many homeowners who are equally exposed to future outages without this financial boost for preparedness.