Sponsors (3)
The bill provides targeted tax relief to many renters — including non-itemizers and lower-AGI households — but reduces federal revenue and gives limited benefit to renters in high-cost areas while creating sharp eligibility cutoffs around the income thresholds.
Low- and middle-income renters can reduce their taxable income by up to $4,000 per person per year, lowering their federal tax bills.
Renters who take the standard deduction (non-itemizers) can claim the rent deduction, expanding the benefit to people who previously could not itemize.
Lower-AGI households receive the bulk of the benefit because income phaseouts limit or exclude higher earners.
All taxpayers/public finances face reduced federal revenue from the new deduction, which could increase deficits or require spending cuts or higher taxes elsewhere.
Renters in high-cost (urban) areas may get limited help because the fixed $4,000 per-person cap is small relative to local rents, reducing equity of the benefit.
Upper-middle earners just below the AGI thresholds and those just above them face sharp cutoffs, creating cliff effects where small income changes can abruptly remove the tax benefit.
Based on analysis of 4 sections of legislative text.
Creates a deduction of up to $4,000 per person for qualified rent paid on a primary residence, subject to AGI limits and indexing, effective after 2026.
Introduced March 3, 2026 by Greg Landsman · Last progress March 3, 2026
Creates a new federal tax deduction that lets eligible individuals deduct up to $4,000 per person per year for rent paid on their primary residence, with eligibility limited by adjusted gross income (AGI) ceilings that vary by filing status. The deduction is available to taxpayers who do not itemize, is indexed for inflation starting after 2027, and applies to tax years beginning after December 31, 2026.