Sponsors
The bill would provide monthly, refundable rent tax credits (including utilities) to reduce housing cost burdens for low- and moderate-income renters, but it increases federal spending, adds administrative complexity, and may underhelp renters where local rents exceed HUD FMR caps.
Low- and moderate-income renters will receive a refundable tax credit when rent exceeds 30% of gross income, reducing their net housing costs.
Renters can receive the credit as monthly advance payments (July–June), improving cash flow so households can pay rent more easily each month.
Including utilities in the definition of rent increases the amount of rent counted, allowing households with high utility costs to qualify for larger credits.
The program increases federal spending and could raise the deficit or require offsetting spending cuts or new revenues if not fully paid for.
Capping creditable rent at 100% of HUD small-area fair market rent (including utility allowance) may leave renters in high-cost units or areas undercompensated when local rents exceed HUD FMRs.
Taxpayers may face added tax-administration complexity and paperwork to elect and reconcile advance payments on prior-year returns.
Based on analysis of 2 sections of legislative text.
Creates a refundable federal tax credit for rent above 30% of gross income, with monthly advance payments and caps tied to HUD small-area fair market rents.
Introduced March 11, 2025 by Raphael Gamaliel Warnock · Last progress March 11, 2025
Creates a new refundable federal income tax credit to help renters whose housing costs exceed 30% of their gross income. The credit pays an applicable percentage of the rent amount above 30% of income, capped at the HUD small-area fair market rent (including utility allowance), and allows monthly advance payments to eligible taxpayers. The bill adds a new tax code section establishing the credit, defines eligible rent and rules for partial-year residents and residents of subsidized housing, requires the IRS to implement a monthly advance-payment program within six months, and takes effect for tax years beginning after December 31, 2025.