Presidential Candidates Seek Monthly IRS Tax Credit for Rent
Democratic Senators Cory Booker and Kamala Harris both wrote legislation last year to help out rent-burdened households. They are planning to introduce new versions of those bills for this legislative session. The new proposals may create a tax credit for housing rental assistance every month. The proposals may involve a tax refund that would be paid out monthly instead of annually. The two impending bills reflect the idea that the American housing crisis will be a 2020 election issue.
Harris’s Rent Relief Act of 2018 floated a tax credit to make housing more affordable for both low- and middle-income households. Her bill establishes a sliding scale for the percentage of excess rent that a taxpayer could claim. A rent-burdened household making $25,000 per year, for example, would be eligible to claim 100 percent of the excess rent (the share higher than 30 percent) as a credit. Rent relief isn’t limited to low-income families. In many areas, households making up to $100,000 would be eligible for some credit.
Booker’s Housing, Opportunity, Mobility, and Equity Act of 2018, on the other hand, would enable any household paying more than 30 percent of its income on the rent to claim the excess paid through the tax credit. The bill sets a cap on the maximum rent allowable, using HUD's fair market rents. Booker’s HOME Act aims to shift tax policy. The bill includes a proposal for a “refund to rainy day savings” program that would allow taxpayers to defer 20 percent of their refund payments for a later date.