II
119THCONGRESS
1
STSESSION 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
MARCH11 (legislative day, MARCH10), 2025
Mr. W
ARNOCKintroduced 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 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
2025’’. 5
SEC. 2. REFUNDABLE CREDIT FOR RENT PAID FOR PRIN-6
CIPAL RESIDENCE. 7
(a) I
NGENERAL.—Subpart C of part IV of sub-8
chapter A of chapter 1 of the Internal Revenue Code of 9
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1986 is amended by inserting after section 36B the fol-1
lowing new section: 2
‘‘SEC. 36C. RENT PAID FOR PRINCIPAL RESIDENCE. 3
‘‘(a) I
NGENERAL.—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) C
REDITLIMITED BY100 PERCENT OFSMALL 12
A
REAFAIRMARKETRENT.—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) D
EFINITIONS ANDSPECIALRULES.—For pur-22
poses of this section— 23
‘‘(1) A
PPLICABLE PERCENTAGE .— 24
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‘‘(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 designated by the Secretary of 7
Housing and Urban Development as an area 8
which has high construction, land, or utility 9
costs relative to area median gross income for 10
purposes of section 42(d)(5), each of the dollar 11
amounts in the table contained in subparagraph 12
(A) shall be increased by $25,000. 13
‘‘(2) P
ARTIAL 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) S
PECIAL RULE FOR INDIVIDUALS RESID -19
ING IN GOVERNMENT -SUBSIDIZED HOUSING.—In the 20
case of a principal residence— 21
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‘‘(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
⁄12of 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) R
ENT.—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) R
ECONCILIATION OF CREDIT ANDADVANCE 17
P
AYMENTS.—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) A
DVANCEPAYMENT.—Chapter 77 of the Internal 23
Revenue Code of 1986 is amended by inserting after sec-24
tion 7527 the following new section: 25
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‘‘SEC. 7527A. ADVANCE PAYMENT OF RENT CREDIT. 1
‘‘(a) I
NGENERAL.—Not later than 6 months after 2
the date of the enactment of the Rent Relief Act of 2025, 3
the Secretary shall establish a program for making ad-4
vance payments of the credit allowed under section 36C 5
on a monthly basis to any taxpayer who— 6
‘‘(1) the Secretary has determined will be al-7
lowed such credit for the taxable year, and 8
‘‘(2) has made an election under subsection (c). 9
‘‘(b) A
MOUNT OFADVANCEPAYMENT.— 10
‘‘(1) I
N GENERAL.—For purposes of subsection 11
(a), the amount of the monthly advance payment of 12
the credit provided to a taxpayer during the applica-13
ble period shall be equal to the lesser of— 14
‘‘(A) an amount equal to— 15
‘‘(i) the amount of the credit which 16
the Secretary has determined will be al-17
lowed to such taxpayer under section 36C 18
for the taxable year ending in such applica-19
ble period, divided by 20
‘‘(ii) 12, or 21
‘‘(B) such other amount as is elected by 22
the taxpayer. 23
‘‘(2) A
PPLICABLE PERIOD.—For purposes of 24
this section, the term ‘applicable period’ means the 25
12-month period from the month of July of the tax-26
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able year through the month of June of the subse-1
quent taxable year. 2
‘‘(c) E
LECTION OFADVANCEPAYMENT.—A taxpayer 3
may elect to receive an advance payment of the credit al-4
lowed under section 36C for any taxable year by including 5
such election on a timely filed return for the preceding 6
taxable year. 7
‘‘(d) I
NTERNAL REVENUESERVICENOTIFICA-8
TION.—The Internal Revenue Service shall take such 9
steps as may be appropriate to ensure that taxpayers who 10
are eligible to receive the credit under section 36C are 11
aware of the availability of the advance payment of such 12
credit under this section. 13
‘‘(e) A
UTHORITY.—The Secretary may prescribe such 14
regulations or other guidance as may be appropriate or 15
necessary for the purposes of carrying out this section.’’. 16
(c) C
ONFORMINGAMENDMENTS.— 17
(1) Section 6211(b)(4)(A) of the Internal Rev-18
enue Code of 1986 is amended by inserting ‘‘, 36C’’ 19
after ‘‘36B’’. 20
(2) Paragraph (2) of section 1324(b) of title 21
31, United States Code, is amended by inserting ‘‘, 22
36C’’ after ‘‘36B’’. 23
(d) C
LERICALAMENDMENTS.— 24
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(1) IN GENERAL.—The table of sections for 1
subpart C of part IV of subchapter A of chapter 1 2
of the Internal Revenue Code of 1986 is amended by 3
inserting after the item relating to section 36B the 4
following new item: 5
‘‘Sec. 36C. Rent paid for principal residence.’’.
(2) ADVANCE PAYMENT .—The table of sections 6
for chapter 77 of such Code is amended by inserting 7
after the item relating to section 7527 the following 8
new item: 9
‘‘Sec. 7527A. Advance payment of middle class tax credit.’’.
(e) EFFECTIVEDATE.—The amendments made by 10
this section shall apply to taxable years beginning after 11
December 31, 2025. 12
Æ
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