Rent Relief Act of 2018

Bill: 115-s-3250
Sponsor: full_name: Sen. Harris, Kamala D. [D-CA]
Introduced: 2018-07-19
Policy area: Taxation
Subjects: Housing supply and affordability

Income tax credits
Latest action: action_date: 2018-07-19
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2018-07-19
action_desc: Introduced in Senate
text: <p><b>Rent Relief Act of 2018</b></p> <p>This bill amends the Internal Revenue Code to allow 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. </p> <p>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 150% of the 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. </p> <p>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. </p>

tv_txt: II 115th CONGRESS 2d Session S. 3250 IN THE SENATE OF THE UNITED STATES July 19, 2018 Ms. Harris (for herself, Mrs. Feinstein , Mr. Blumenthal , and Ms. Hassan ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL 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 2018 . 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: 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 150 percent of 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 150 percent of the 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, the table contained in subparagraph (A) shall be applied by substituting $125,000 for $100,000 each place it appears. (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 of the amount of rent paid by the taxpayer (and not subsidized under any such program) during the taxable year with respect to such residence. (4) 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). . (b) Clerical amendment 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. . (c) Effective date The amendments made by this section shall apply with respect to taxable years beginning after December 31, 2017.