IN THE SENATE OF THE UNITED STATES
April 10, 2019
Ms. Harris (for herself, Mr. Blumenthal, and Ms. Hassan) introduced the following bill; which was read twice and referred to the Committee on Finance
To amend the Internal Revenue Code of 1986 to allow for a credit against tax for rent paid on the personal residence of the taxpayer.
This Act may be cited as the
Rent Relief Act of 2019.
Refundable credit for rent paid for principal residence
Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36B the following new section:
Rent paid for principal residence
In the case of an individual who leases the individual’s principal residence (within the meaning of section 121) during the taxable year and who pays rent with respect to such residence in excess of 30 percent of the taxpayer’s gross income for such taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to the applicable percentage of such excess.
Credit limited by 100 percent of small area fair market rent
Solely for purposes of determining the amount of the credit allowed under subsection (a) with respect to a residence for the taxable year, there shall not be taken into account rent in excess of an amount equal to 100 percent of the small area fair market rent (including the utility allowance) applicable to the residence involved (as most recently published, as of the beginning of the taxable year, by the Department of Housing and Urban Development).
Definitions and special rules
For purposes of this section—
Except as provided in subparagraph (B), the applicable percentage shall be determined in accordance with the following table:
|If gross income is:||percentage is:|
|Not over $25,000||100 percent|
|Over $25,000, but not over $50,000||75 percent|
|Over $50,000, but not over $75,000||50 percent|
|Over $75,000, but not over $100,000||25 percent|
|Over $100,000||0 percent.|
In the case of an individual whose principal residence is located in an area for which, under the rule published in the Federal Register on November 16, 2016 (81 Fed. Reg. 80567), the small area fair market rent is used for purposes of the Housing Choice Voucher Program, each of the dollar amounts in the table contained in subparagraph (A) shall be increased by $25,000.
Partial year residence
The Secretary shall prescribe such rules as are necessary to carry out the purposes of this section for taxpayers with respect to whom a residence is a principal residence for only a portion of the taxable year.
Special rule for individuals residing in government-subsidized housing
In the case of a principal residence—
the rent with respect to which is subsidized under a Federal, State, local, or tribal program, and
with respect to which the taxpayer elects the application of this paragraph,
The term rent includes any amount paid for utilities of a type taken into account for purposes of determining the utility allowance under section 42(g)(2)(B)(ii).
Reconciliation of credit and advance payments
The amount of the credit allowed under this section for any taxable year shall be reduced (but not below zero) by the aggregate amount of any advance payments of such credit under section 7527A for such taxable year.
Chapter 77 of the Internal Revenue Code of 1986 is amended by inserting after section 7527 the following new section:
Advance payment of middle class tax credit
Not later than 6 months after the date of the enactment of the Rent Relief Act of 2019, the Secretary shall establish a program for making advance payments of the credit allowed under section 36C on a monthly basis to any taxpayer who—
the Secretary has determined will be allowed such credit for the taxable year, and
has made an election under subsection (c).
Amount of advance payment
For purposes of subsection (a), the amount of the monthly advance payment of the credit provided to a taxpayer during the applicable period shall be equal to the lesser of—
an amount equal to—
the amount of the credit which the Secretary has determined will be allowed to such taxpayer under section 36C for the taxable year ending in such applicable period, divided by
such other amount as is elected by the taxpayer.
For purposes of this section, the term applicable period means the 12-month period from the month of July of the taxable year through the month of June of the subsequent taxable year.
Election of advance payment
A taxpayer may elect to receive an advance payment of the credit allowed under section 36C for any taxable year by including such election on a timely filed return for the preceding taxable year.
Internal Revenue Service notification
The Internal Revenue Service shall take such steps as may be appropriate to ensure that taxpayers who are eligible to receive the credit under section 36C are aware of the availability of the advance payment of such credit under this section.
The Secretary may prescribe such regulations or other guidance as may be appropriate or necessary for the purposes of carrying out this section.
The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36B the following new item:
Sec. 36C. Rent paid for principal residence.
The table of sections for chapter 77 of such Code is amended by inserting after the item relating to section 7527 the following new item:
Sec. 7527A. Advance payment of middle class tax credit.
The amendments made by this section shall apply with respect to taxable years beginning after December 31, 2018.