Sponsor
Josh S. Gottheimer
Representative · D-NJ
Representative · D-NJ
The bill provides a modest, targeted up-to-$350 tax credit to help household energy costs—especially for renters and low/moderate-income households—but its nonrefundable design, income phaseouts, anti‑double‑claim rules, and additional paperwork impose limits and administrative burdens that reduce reach and usability for the poorest households and create compliance costs for landlords, renters, and the IRS.
Low- and moderate-income households (homeowners and renters) can reduce federal income tax liability by up to $350 per year to help cover home electricity and gas costs.
Renters whose utilities are included in rent can claim the credit because landlords are required to furnish annual receipts showing the utility portion of rent, enabling renters to access the benefit.
The credit is limited to expenses for a taxpayer's principal residence, focusing the benefit on household energy burdens rather than businesses or second homes.
Very low-income filers with little or no federal income tax liability may be unable to use the nonrefundable $350 credit, leaving the poorest households unable to fully benefit.
Landlords face added administrative burden and compliance costs to calculate and furnish annual utility receipts, and tenants and the IRS face increased recordkeeping and coordination requirements.
The credit cannot be claimed for utility expenses already used for another deduction or credit, which can reduce or eliminate eligibility for taxpayers who receive other energy-related tax benefits.
Based on analysis of 2 sections of legislative text.
Creates a nonrefundable personal tax credit up to $350 for residential electricity and gas costs, with income phaseouts and landlord receipt requirements.
Official title: To amend the Internal Revenue Code of 1986 to establish a refundable tax credit for individuals for amounts paid for gas and electricity for primary residences.
Introduced January 22, 2025 by Josh S. Gottheimer · Last progress January 22, 2025
Creates a new nonrefundable personal tax credit of up to $350 per year for qualified residential electricity and natural gas costs paid for an individual's principal residence, including utility charges paid through rent. The credit phases out for higher-income taxpayers (joint filers over $400,000 MAGI; others over $200,000 MAGI), disallows double benefits with other tax deductions/credits and dependent claims, and requires landlords who include utilities in rent to provide an annual receipt to the tenant and the IRS. The credit applies to amounts paid or incurred after enactment.