Rent Relief Act of 2025

This proposal would create a federal income tax credit to help renters whose monthly housing costs take up too much of their income. If you rent your main home and your yearly rent is more than 30% of your gross income, you could get a tax credit worth a percentage of the amount above that 30% line . The credit would only count rent (and certain utilities) up to a local cap set by HUD’s “small area fair market rent,” which helps keep the benefit tied to typical rents in your neighborhood . The credit could also be paid in advance during the year and then checked against your tax return at filing time .

Key points

• Who is affected: Renters who lease their main home and pay more than 30% of their gross income in rent; certain utility costs may count as part of rent if they are the type HUD includes in its utility allowance .
• What changes: A new tax credit based on a percentage of the rent you pay above 30% of your income, capped by your area’s HUD fair market rent; possible advance payments with year-end reconciliation .
• When: Applied for the taxable year, using the HUD rent levels published at the start of that year .