Rent Relief Act of 2023

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 2023 2. Refundable credit for rent paid for principal residence (a) In general Subpart C of part IV of subchapter A of chapter 1 36C. Renter tax credit (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 adjusted 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 The term applicable percentage The applicable If the taxpayer’s adjusted 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. (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) Rent The term rent (4) Married individuals filing separate returns In the case of individuals who are married to each other, have the same principal residence, and do not file a joint return for the taxable year, the credit determined under this section with respect to each such individual shall be 50 percent of the amount of the credit which would be determined under this section if such individuals filed a joint return, unless such individuals agree on a different division of such credit (in such manner as the Secretary may provide) which does not aggregate to more 100 percent of such amount. (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 7527B for such taxable year. . (b) Advance payment Chapter 77 7527B. Advance payment of renter tax credit (a) In general Not later than 6 months after the date of the enactment of the Rent Relief Act of 2023 (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) Regulations The Secretary may prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes 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. Renter tax credit. . (2) Advance payment The table of sections for chapter 77 of such Code is amended by inserting after the item relating to section 7527A the following new item: Sec. 7527B. Advance payment of renter tax credit. . (d) Effective date The amendments made by this section shall apply with respect to taxable years beginning after December 31, 2023. (e) Community outreach Immediately upon the enactment of this Act, in addition to amounts otherwise available, there are appropriated out of any money in the Treasury not otherwise appropriated $50,000,000 to remain available until 5 years after the enactment of this Act for necessary expenses for the Internal Revenue Service to support efforts to increase enrollment of eligible households in the Renter Tax Credit allowed under section 36C

Summary: Rent Relief Act of 2023 This bill allows a refundable income tax credit for individuals who pay rent for a principal residence that exceeds 30% of their adjusted gross income for the taxable year. The amount of the credit ranges from 25% to 100% of the excess rent, depending on the adjusted gross income of the taxpayer. The credit is not available for taxpayers with adjusted gross incomes that exceed $100,000. Rent that exceeds 100% of the small area fair market rent (including the utility allowance) for the residence may not be taken into account in determining the amount of the credit. The Department of the Treasury must establish a program for making advance payments of the credit on a monthly basis and provide for an outreach program to increase enrollment of taxpayers in the renter tax credit program.