Rent Relief Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2169 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. IN THE HOUSE OF REPRESENTATIVES APRIL 9, 2019 Mr. DANNY K. DAVIS of Illinois (for himself, Mr. GOMEZ, and Mr. PETERS) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to allow for a credit against tax for rent paid on the personal resi- dence of the taxpayer. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Rent Relief Act of 4 2019’’. 5 SEC. 2. REFUNDABLE CREDIT FOR RENT PAID FOR PRIN- 6 CIPAL RESIDENCE. 7 (a) IN GENERAL.—Subpart C of part IV of sub- 8 chapter A of chapter 1 of the Internal Revenue Code of 9 VerDate Sep 11 2014 04:21 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2169.IH H2169 kjohnson on DSK79L0C42 with BILLS 2 •HR 2169 IH 1986 is amended by inserting after section 36B the fol- 1 lowing new section: 2 ‘‘SEC. 36C. RENT PAID FOR PRINCIPAL RESIDENCE. 3 ‘‘(a) IN GENERAL.—In the case of an individual who 4 leases the individual’s principal residence (within the 5 meaning of section 121) during the taxable year and who 6 pays rent with respect to such residence in excess of 30 7 percent of the taxpayer’s gross income for such taxable 8 year, there shall be allowed as a credit against the tax 9 imposed by this subtitle for such taxable year an amount 10 equal to the applicable percentage of such excess. 11 ‘‘(b) CREDIT LIMITED BY 100 PERCENT OF SMALL 12 AREA FAIR MARKET RENT.—Solely for purposes of deter- 13 mining the amount of the credit allowed under subsection 14 (a) with respect to a residence for the taxable year, there 15 shall not be taken into account rent in excess of an 16 amount equal to 100 percent of the small area fair market 17 rent (including the utility allowance) applicable to the resi- 18 dence involved (as most recently published, as of the be- 19 ginning of the taxable year, by the Department of Housing 20 and Urban Development). 21 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur- 22 poses of this section— 23 ‘‘(1) APPLICABLE PERCENTAGE.— 24 VerDate Sep 11 2014 04:21 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2169.IH H2169 kjohnson on DSK79L0C42 with BILLS 3 •HR 2169 IH ‘‘(A) IN GENERAL.—Except as provided in 1 subparagraph (B), the applicable percentage 2 shall be determined in accordance with the fol- 3 lowing table: 4 The applicable ‘‘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. ‘‘(B) HIGH-COST AREAS.—In the case of 5 an individual whose principal residence is lo- 6 cated in an area for which, under the rule pub- 7 lished in the Federal Register on November 16, 8 2016 (81 Fed. Reg. 80567), the small area fair 9 market rent is used for purposes of the Hous- 10 ing Choice Voucher Program, each of the dollar 11 amounts in the table contained in subparagraph 12 (A) shall be increased by $25,000. 13 ‘‘(2) PARTIAL YEAR RESIDENCE.—The Sec- 14 retary shall prescribe such rules as are necessary to 15 carry out the purposes of this section for taxpayers 16 with respect to whom a residence is a principal resi- 17 dence for only a portion of the taxable year. 18 ‘‘(3) SPECIAL RULE FOR INDIVIDUALS RESID- 19 ING IN GOVERNMENT-SUBSIDIZED HOUSING.—In the 20 case of a principal residence— 21 VerDate Sep 11 2014 04:21 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2169.IH H2169 kjohnson on DSK79L0C42 with BILLS 4 •HR 2169 IH ‘‘(A) the rent with respect to which is sub- 1 sidized under a Federal, State, local, or tribal 2 program, and 3 ‘‘(B) with respect to which the taxpayer 4 elects the application of this paragraph, 5 in lieu of the credit determined under subsection (a), 6 there shall be allowed as a credit against the tax im- 7 posed by this subtitle for such taxable year an 8 amount equal to 1⁄12 of the amount of rent paid by 9 the taxpayer (and not subsidized under any such 10 program) during the taxable year with respect to 11 such residence. 12 ‘‘(4) RENT.—The term ‘rent’ includes any 13 amount paid for utilities of a type taken into ac- 14 count for purposes of determining the utility allow- 15 ance under section 42(g)(2)(B)(ii). 16 ‘‘(d) RECONCILIATION OF CREDIT AND ADVANCE 17 PAYMENTS.—The amount of the credit allowed under this 18 section for any taxable year shall be reduced (but not 19 below zero) by the aggregate amount of any advance pay- 20 ments of such credit under section 7527A for such taxable 21 year.’’. 22 (b) ADVANCE PAYMENT.—Chapter 77 of the Internal 23 Revenue Code of 1986 is amended by inserting after sec- 24 tion 7527 the following new section: 25 VerDate Sep 11 2014 04:21 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2169.IH H2169 kjohnson on DSK79L0C42 with BILLS 5 •HR 2169 IH ‘‘SEC. 7527A. ADVANCE PAYMENT OF MIDDLE CLASS TAX 1 CREDIT. 2 ‘‘(a) IN GENERAL.—Not later than 6 months after 3 the date of the enactment of the Rent Relief Act of 2019, 4 the Secretary shall establish a program for making ad- 5 vance payments of the credit allowed under section 36C 6 on a monthly basis to any taxpayer who— 7 ‘‘(1) the Secretary has determined will be al- 8 lowed such credit for the taxable year, and 9 ‘‘(2) has made an election under subsection (c). 10 ‘‘(b) AMOUNT OF ADVANCE PAYMENT.— 11 ‘‘(1) IN GENERAL.—For purposes of subsection 12 (a), the amount of the monthly advance payment of 13 the credit provided to a taxpayer during the applica- 14 ble period shall be equal to the lesser of— 15 ‘‘(A) an amount equal to— 16 ‘‘(i) the amount of the credit which 17 the Secretary has determined will be al- 18 lowed to such taxpayer under section 36C 19 for the taxable year ending in such applica- 20 ble period, divided by 21 ‘‘(ii) 12, or 22 ‘‘(B) such other amount as is elected by 23 the taxpayer. 24 ‘‘(2) APPLICABLE PERIOD.—For purposes of 25 this section, the term ‘applicable period’ means the 26 VerDate Sep 11 2014 04:21 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2169.IH H2169 kjohnson on DSK79L0C42 with BILLS 6 •HR 2169 IH 12-month period from the month of July of the tax- 1 able year through the month of June of the subse- 2 quent taxable year. 3 ‘‘(c) ELECTION OF ADVANCE PAYMENT.—A taxpayer 4 may elect to receive an advance payment of the credit al- 5 lowed under section 36C for any taxable year by including 6 such election on a timely filed return for the preceding 7 taxable year. 8 ‘‘(d) INTERNAL REVENUE SERVICE NOTIFICA- 9 TION.—The Internal Revenue Service shall take such 10 steps as may be appropriate to ensure that taxpayers who 11 are eligible to receive the credit under section 36C are 12 aware of the availability of the advance payment of such 13 credit under this section. 14 ‘‘(e) AUTHORITY.—The Secretary may prescribe such 15 regulations or other guidance as may be appropriate or 16 necessary for the purposes of carrying out this section.’’. 17 (c) CLERICAL AMENDMENTS.— 18 (1) IN GENERAL.—The table of sections for 19 subpart C of part IV of subchapter A of chapter 1 20 of the Internal Revenue Code of 1986 is amended by 21 inserting after the item relating to section 36B the 22 following new item: 23 ‘‘Sec. 36C. Rent paid for principal residence.’’. (2) ADVANCE PAYMENT.—The table of sections 24 for chapter 77 of such Code is amended by inserting 25 VerDate Sep 11 2014 04:21 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2169.IH H2169 kjohnson on DSK79L0C42 with BILLS 7 •HR 2169 IH after the item relating to section 7527 the following 1 new item: 2 ‘‘Sec. 7527A. Advance payment of middle class tax credit.’’. (d) EFFECTIVE DATE.—The amendments made by 3 this section shall apply with respect to taxable years begin- 4 ning after December 31, 2018. 5 Æ VerDate Sep 11 2014 04:21 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H2169.IH H2169 kjohnson on DSK79L0C42 with BILLS