This bill — known as the Rent Relief Act — would provide refundable tax credit to renters who spend more than 30% of their annual gross income on rent in housing that’s less than 150% of the fair market rent for their location as determined by the Dept. of Housing & Urban Development (HUD). The tax credit would cover a higher proportion of rent costs for lower-income renters, and wouldn’t apply to renters earning over $100,000 annually (or $125,000 for especially high cost areas as determined by HUD). A breakdown of how the tax credit would apply to renters in various income ranges can be found below.
The tax credit would cover the specified proportion of rent for renters in the following income ranges (note that the $100k references are changed to $125k for high cost areas):
Less than $25k: 100% of rent;
$25k - $50k: 75% of rent;
$50k - $75k: 50% of rent;
$75k - $100k: 25% of rent;
Over $100k: 0% of rent.
This legislation would apply to the 2018 tax year if enacted.