Rent Relief Act of 2019

To amend the Internal Revenue Code of 1986 to allow for a credit against tax for rent paid on the personal residence of the taxpayer. 1. Short title This Act may be cited as the Rent Relief Act of 2019 2. Refundable credit for rent paid for principal residence (a) In general Subpart C of part IV of subchapter A of chapter 1 36C. Rent paid for principal residence (a) In general In the case of an individual who leases the individual’s principal residence (within the meaning of section 121) during the taxable year and who pays rent with respect to such residence in excess of 30 percent of the taxpayer’s gross income for such taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to the applicable percentage of such excess. (b) Credit limited by 100 percent of small area fair market rent Solely for purposes of determining the amount of the credit allowed under subsection (a) with respect to a residence for the taxable year, there shall not be taken into account rent in excess of an amount equal to 100 percent of the small area fair market rent (including the utility allowance) applicable to the residence involved (as most recently published, as of the beginning of the taxable year, by the Department of Housing and Urban Development). (c) Definitions and special rules For purposes of this section— (1) Applicable percentage (A) In general Except as provided in subparagraph (B), the applicable percentage shall be determined in accordance with the following table: The applicable If gross income is: percentage is: Not over $25,000 100 percent Over $25,000, but not over $50,000 75 percent Over $50,000, but not over $75,000 50 percent Over $75,000, but not over $100,000 25 percent Over $100,000 0 percent. (B) High-cost areas In the case of an individual whose principal residence is located in an area for which, under the rule published in the Federal Register on November 16, 2016 (81 Fed. Reg. 80567), the small area fair market rent is used for purposes of the Housing Choice Voucher Program, each of the dollar amounts in the table contained in subparagraph (A) shall be increased by $25,000. (2) Partial year residence The Secretary shall prescribe such rules as are necessary to carry out the purposes of this section for taxpayers with respect to whom a residence is a principal residence for only a portion of the taxable year. (3) Special rule for individuals residing in government-subsidized housing In the case of a principal residence— (A) the rent with respect to which is subsidized under a Federal, State, local, or tribal program, and (B) with respect to which the taxpayer elects the application of this paragraph, in lieu of the credit determined under subsection (a), there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 1/12 (4) Rent The term rent (d) Reconciliation of credit and advance payments The amount of the credit allowed under this section for any taxable year shall be reduced (but not below zero) by the aggregate amount of any advance payments of such credit under section 7527A for such taxable year. . (b) Advance payment Chapter 77 7527A. Advance payment of middle class tax credit (a) In general Not later than 6 months after the date of the enactment of the Rent Relief Act of 2019 (1) the Secretary has determined will be allowed such credit for the taxable year, and (2) has made an election under subsection (c). (b) Amount of advance payment (1) In general For purposes of subsection (a), the amount of the monthly advance payment of the credit provided to a taxpayer during the applicable period shall be equal to the lesser of— (A) an amount equal to— (i) the amount of the credit which the Secretary has determined will be allowed to such taxpayer under section 36C for the taxable year ending in such applicable period, divided by (ii) 12, or (B) such other amount as is elected by the taxpayer. (2) Applicable period For purposes of this section, the term applicable period (c) Election of advance payment A taxpayer may elect to receive an advance payment of the credit allowed under section 36C for any taxable year by including such election on a timely filed return for the preceding taxable year. (d) Internal Revenue Service notification The Internal Revenue Service shall take such steps as may be appropriate to ensure that taxpayers who are eligible to receive the credit under section 36C are aware of the availability of the advance payment of such credit under this section. (e) Authority The Secretary may prescribe such regulations or other guidance as may be appropriate or necessary for the purposes of carrying out this section. . (c) Clerical amendments (1) In general The table of sections for subpart C of part IV of subchapter A of chapter 1 Sec. 36C. Rent paid for principal residence. . (2) Advance payment The table of sections for chapter 77 of such Code is amended by inserting after the item relating to section 7527 the following new item: Sec. 7527A. Advance payment of middle class tax credit. . (d) Effective date The amendments made by this section shall apply with respect to taxable years beginning after December 31, 2018.

Summary: Rent Relief Act of 2019 This bill allows a refundable tax credit for individuals who pay rent for a principal residence that exceeds 30% of the individual's gross income for the taxable year. The amount of the credit ranges from 25% to 100% of the excess rent, depending on the gross income of the taxpayer. The credit is not available for taxpayers with gross income that exceeds $100,000 ($125,000 for a taxpayer whose principal residence is located in a high-cost area, as defined by the bill). Rent that exceeds 100% of the small area fair market rent (including the utility allowance) for the residence may not be taken into account for the purpose of determining the amount of the credit. For individuals who reside in government-subsidized housing, the bill allows a credit equal to 1/12 of the rent paid by the taxpayer (and not subsidized under the program) during the year with respect to the residence. The Department of the Treasury must establish a program for making advance payments of the credit on a monthly basis.