S 4728 — Rent Relief Act of 2022

Summary

Rent Relief Act of 2022 This bill allows a refundable tax credit through 2024 for individuals who pay rent for a principal residence that exceeds 30% of their gross income for the taxable year. The amount of the credit ranges from 25% to 100% of the excess rent, depending on the gross income of the taxpayer. The credit is not available for taxpayers with gross income that exceeds $100,000 ($125,000 for a taxpayer whose principal residence is located in a high-cost area, as defined by the bill). Rent that exceeds 100% of the small area fair market rent (including the utility allowance) for the residence may not be taken into account for the purpose of determining the amount of the credit. For individuals who reside in government-subsidized housing, the bill allows a credit equal to 1/12th of the rent paid by the taxpayer (and not subsidized under the program) during the year with respect to the residence. The Department of the Treasury must establish a program for making advance payments of the credit on a monthly basis.

Bill Text

• Introduced Introduced in Senate Current html August 02, 2022

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The bill creates a new tax credit for rent paid on principal residences for individuals who pay more than 30 percent of their gross income in rent.

• Section 36B

  SEC. 36C. RENT PAID FOR PRINCIPAL RESIDENCE.

  Adds a new section for a tax credit related to rent payments for principal residences.

• Section 36C

  (a) In General.--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.

  Establishes criteria for individuals to qualify for the rent credit based on their rent-to-income ratio.

• Section 36C

  (b) 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).

  Limits the credit to avoid consideration of rent above the fair market rent threshold.

• Section 36C

  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.

  Creates a scale for determining the percentage of rent eligible for the credit based on the taxpayer's income.

• Section 36C

  (e) Termination.--This section shall not apply to taxable years beginning after December 31, 2024.

  Establishes a sunset provision for the rent credit, ending its application after specified tax years.

• Section 7527

  SEC. 7527A. ADVANCE PAYMENT OF MIDDLE CLASS TAX CREDIT.

  Introduces a new section for advance payments related to the rent tax credit.

• Section 7527A

  (a) In General.--Not later than 6 months after the date of the enactment of the Rent Relief Act of 2022, 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-- (1) the Secretary has determined will be allowed such credit for the taxable year, and (2) has made an election under subsection (c).

  Requires the establishment of a program for advance payments of the rent credit.

• Section 7527A

  (e) Authority.--The Secretary may prescribe such regulations or other guidance as may be appropriate or necessary for the purposes of carrying out this section.

  Grants the Secretary regulatory authority to implement the advance payment program.

• 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.

  Updates the tax code to include the new rent credit section in its section table.

• 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.

  Updates the tax code to include the advance payment section in its section table.

• The amendments made by this section shall apply to taxable years beginning after December 31, 2022.

  Sets the effective date for the changes introduced by this bill.

Action History

1. August 02, 2022

   Introduced in Senate

2. August 02, 2022

   Read twice and referred to the Committee on Finance.

Sponsors

• Raphael G. Warnock · Primary

Subjects