[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 968 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 968
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 SENATE OF THE UNITED STATES
March 11 (legislative day, March 10), 2025
Mr. Warnock introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Rent Relief Act of 2025''.
SEC. 2. REFUNDABLE CREDIT FOR RENT PAID FOR PRINCIPAL RESIDENCE.
(a) In General.--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:
``SEC. 36C. RENT PAID FOR PRINCIPAL RESIDENCE.
``(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.
``(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).
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Applicable percentage.--
``(A) In general.--Except as provided in
subparagraph (B), the applicable percentage shall be
determined in accordance with the following table:
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 an
individual whose principal residence is located in an
area designated by the Secretary of Housing and Urban
Development as an area which has high construction,
land, or utility costs relative to area median gross
income for purposes of section 42(d)(5), each of the
dollar amounts in the table contained in subparagraph
(A) shall be increased by $25,000.
``(2) 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.
``(3) Special rule for individuals residing in government-
subsidized housing.--In the case of a principal residence--
``(A) the rent with respect to which is subsidized
under a Federal, State, local, or tribal program, and
``(B) with respect to which the taxpayer elects the
application of this paragraph,
in lieu of the credit determined under subsection (a), there
shall be allowed as a credit against the tax imposed by this
subtitle for such taxable year an amount equal to \1/12\ of the
amount of rent paid by the taxpayer (and not subsidized under
any such program) during the taxable year with respect to such
residence.
``(4) Rent.--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).
``(d) 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.''.
(b) Advance Payment.--Chapter 77 of the Internal Revenue Code of
1986 is amended by inserting after section 7527 the following new
section:
``SEC. 7527A. ADVANCE PAYMENT OF RENT CREDIT.
``(a) In General.--Not later than 6 months after the date of the
enactment of the Rent Relief Act of 2025, 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).
``(b) Amount of Advance Payment.--
``(1) In general.--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--
``(A) an amount equal to--
``(i) 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
``(ii) 12, or
``(B) such other amount as is elected by the
taxpayer.
``(2) Applicable period.--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.
``(c) 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.
``(d) 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.
``(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.''.
(c) Conforming Amendments.--
(1) Section 6211(b)(4)(A) of the Internal Revenue Code of
1986 is amended by inserting ``, 36C'' after ``36B''.
(2) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``, 36C'' after ``36B''.
(d) Clerical Amendments.--
(1) In general.--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.''.
(2) Advance payment.--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.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
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