Sponsors
The bill offers modest, targeted tax relief for energy costs to low- and moderate-income households but limits its reach and effectiveness with a low $350 cap, a nonrefundable design, and added administrative burdens on landlords.
Low- and moderate-income households (renters and homeowners) can reduce federal tax liability by up to $350 per year for gas and electric costs, lowering net energy expenses.
Renters whose landlords include utilities in rent gain landlord documentation that enables them to claim the credit, making it easier for renters to access the benefit.
Lowest-income filers may receive little or no benefit because the credit is nonrefundable and capped at $350, so households with little tax liability or high energy burdens get minimal relief.
Landlords—especially small landlords—face new documentation and IRS reporting requirements to allocate utility portions of rent, creating compliance costs that could be passed on to tenants and complicating administration (including rules prohibiting double-claiming).
Higher-income households are excluded (no credit if MAGI > $400k joint or $200k single), so the benefit does not reach wealthier taxpayers.
Based on analysis of 2 sections of legislative text.
Creates a nonrefundable tax credit up to $350 for qualified gas and electric costs for an individual's principal residence, phased out above set income thresholds.
Introduced January 22, 2025 by Josh S. Gottheimer · Last progress January 22, 2025
Creates a new federal nonrefundable tax credit of up to $350 for qualified gas and electric costs paid for an individual’s principal residence. The credit is phased out for higher-income taxpayers (disallowed above $400,000 MAGI for joint filers and $200,000 for others), is not refundable, and cannot be claimed if the same expense is claimed elsewhere or if the filer is claimed as a dependent. Landlords who include gas or electric service in rent must provide an annual written receipt to tenants and the IRS by January 31 reporting the portion of prior-year rent attributable to gas and electric service. The change applies to amounts paid or incurred after enactment.