Rent Relief Act of 2022
Bill: H.R.8357 | Sponsor: Rep. Davis, Danny K. (D-IL)
Policy area: Taxation

Summary:
Rent Relief Act of 2022
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.

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rent Relief Act of 2022''.

SEC. 2. REFUNDABLE CREDIT FOR RENT PAID FOR PRINCIPAL RESIDENCE.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 36B the following new section:

``SEC. 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 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' means the percentage determined in accordance with 
        the following table:

                                                         The applicable
``If the taxpayer's adjusted gross                       percentage is:
        income 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' includes any amount paid for 
        utilities of a type taken into account for purposes of 
        determining the utility allowance under section 
        42(g)(2)(B)(ii).
            ``(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 of the Internal Revenue Code of 
1986 is amended by inserting after section 7527A the following new 
section:

``SEC. 7527B. ADVANCE PAYMENT OF CREDIT FOR RENT PAID FOR PRINCIPAL 
              RESIDENCE.

    ``(a) In General.--Not later than 6 months after the date of the 
enactment of the Rent Relief Act of 2022, the Secretary shall establish 
a program for making advance payments of the credit allowed under 
section 36C on a monthly basis to any taxpayer who--
            ``(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' means the 12-month period from the 
        month of July of the taxable year through the month of June of 
        the subsequent taxable year.
    ``(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 of the Internal Revenue 
        Code of 1986 is amended by inserting after the item relating to 
        section 36B the following new item:

``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 7527A the following new item:

``Sec. 7527B. Advance payment of credit for rent paid for principal 
                            residence.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to taxable years beginning after December 31, 2021.
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