Sponsor
George Latimer
Representative · D-NY
Representative · D-NY
The bill provides many homeowners a direct tax credit to lower mortgage costs, but it excludes low‑income filers (nonrefundable), phases out for higher incomes, and replaces existing deductions/credits which can complicate or worsen some taxpayers' outcomes.
Homeowners, especially middle‑class families, can reduce their federal tax liability by up to $2,000 per year through a mortgage acquisition interest tax credit, lowering annual housing costs.
Low‑income homeowners with little or no tax liability receive no benefit because the credit is nonrefundable, leaving those who pay mortgage interest but owe little tax without relief.
Taxpayers who currently claim the mortgage interest deduction or other credits may face loss of those deductions or more complicated tax outcomes, potentially raising taxable income or complicating tax planning.
Homeowners with higher modified adjusted gross income (above the phase‑out thresholds) will see the credit reduced or eliminated, limiting the benefit for higher‑income or upper‑middle households.
Based on analysis of 2 sections of legislative text.
Creates a nonrefundable mortgage interest tax credit up to $2,000 per taxpayer for interest on acquisition debt for a principal residence, with income phaseouts and implementation rules.
Creates a new nonrefundable federal tax credit for home mortgage interest paid on a primary residence, replacing the option to deduct that interest for amounts claimed as the credit. The credit is capped at $2,000 per taxpayer ($1,000 if married filing separately), phases down for higher earners, excludes nonresident aliens, and becomes effective for tax years beginning after December 31, 2026. The credit applies only to acquisition indebtedness used to buy, build, or substantially improve the taxpayer’s principal residence, is subject to MAGI phaseouts, contains allocation rules for co-owners who are not married, will be inflation-adjusted after 2027, and requires Treasury regulations to implement.
Official title: To amend the Internal Revenue Code of 1986 to allow a credit against tax for qualified residence interest paid or accrued during the taxable year, and for other purposes.
Introduced June 30, 2026 by George Latimer · Last progress June 30, 2026