Sponsors (3)
The bill provides targeted, refundable-like tax relief to many renters (including non-itemizers) but does so at the cost of federal revenue, leaves high-cost renters undercovered due to a flat cap and eligibility limits, and adds administrative complexity.
Renters (especially low- and moderate-income households) can deduct up to $4,000 of rent for their primary residence, directly lowering taxable income and reducing federal income tax liability.
The deduction is available to taxpayers who take the standard deduction (non-itemizers), so people who don't itemize still receive the rental tax benefit.
Income-targeted phaseouts concentrate the benefit on lower- and moderate-income households by excluding higher-AGI taxpayers, focusing assistance where it is intended.
Many renters—particularly those with AGI above the phaseout thresholds and those in high-cost rental markets—will receive little or no meaningful relief because of the eligibility cutoffs and the $4,000 per-person cap.
Allowing this deduction reduces federal revenue, which could widen deficits or require spending cuts or tax increases elsewhere.
Implementing indexing and the new deduction requires IRS rulemaking and administrative changes, creating additional compliance complexity for taxpayers and workload/cost for the IRS/Treasury.
Based on analysis of 4 sections of legislative text.
Creates an above-the-line deduction of up to $4,000 per person for rent on a primary residence, with AGI phaseouts and inflation indexing.
Official title: To amend the Internal Revenue Code of 1986 to establish a deduction for certain amounts paid for rent for a primary residence.
Introduced March 3, 2026 by Greg Landsman · Last progress March 3, 2026
Creates a new federal income tax deduction that lets eligible renters deduct up to $4,000 of qualified rent paid for their primary residence each year. The deduction phases out for higher adjusted gross incomes, is indexed for inflation after 2027, is available to taxpayers who do not itemize, and applies to tax years starting after December 31, 2026.