107th CONGRESS
1st Session
H. R. 2338
To amend the Internal Revenue Code of 1986 to allow a refundable
credit against the income tax for the amount paid in rent in excess of 30
percent of income.
IN THE HOUSE OF REPRESENTATIVES
June 27, 2001
Mr. ENGEL (for himself, Ms. EDDIE BERNICE JOHNSON of Texas, Mr. FILNER, Mr.
LANTOS, Mr. HINCHEY, Mr. JACKSON of Illinois, Mr. PAYNE, Mr. NADLER, Ms. MCKINNEY,
Mr. PASCRELL, Mr. OWENS, Mr. SERRANO, Mr. PALLONE, Ms. WATERS, Mr. KUCINICH,
Mr. TOWNS, Mr. SANDERS, Mr. MEEKS of New York, and Mr. HONDA) 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 a refundable
credit against the income tax for the amount paid in rent in excess of 30
percent of income.
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 `Renters Relief Act of 2001'.
SEC. 2. REFUNDABLE CREDIT FOR RENT IN EXCESS OF 30 PERCENT OF INCOME.
(a) IN GENERAL- Subpart C of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 (relating to refundable credits) is amended by redesignating
section 35 as section 36 and by inserting after section 34 the following new
section:
`SEC. 35. CREDIT FOR RENT IN EXCESS OF 30 PERCENT OF INCOME.
`(a) ALLOWANCE OF CREDIT- In the case of an individual, there shall be allowed
as a credit against the tax imposed by this chapter for the taxable year an
amount equal to the excess rent amount paid by the taxpayer during the taxable
year.
`(1) DOLLAR LIMITATION- The amount of the credit allowable under subsection
(a) for a taxable year shall be not exceed $2,500.
`(A) IN GENERAL- For purposes of this section, the $2,500 amount referred
to in paragraph (1) shall be reduced (but not below zero) by an amount
equal to $25 multiplied by the number of percentage points (or fraction
thereof) by which the taxpayer's modified adjusted gross income for the
taxable year exceeds 80 percent of the area median income applicable to
such taxpayer based on family size.
`(3) SPECIAL RULE FOR TAXPAYERS SUBJECT TO MORE THAN ONE AREA MEDIAN INCOME
IN A TAXABLE YEAR- For purposes of paragraph (2), in the case of a taxpayer
who is subject to more than 1 area median income in the taxable year by
reason of changes in family size or location of personal residence, the
area median income applicable to such taxpayer--
`(A)(i) shall be determined as of the first day of each month on the basis
of such family size and location, and
`(ii) shall be 1/12 of the area median income so applicable, and
`(B) shall be the aggregate of the amounts determined under subparagraph
(A) for each month of the taxable year.
`(4) AREA MEDIAN INCOME- For purposes of this subsection, the term `area
median income' means area median income as determined by the Secretary of
Housing and Urban Development for purposes of the United States Housing
Act of 1937 (42 U.S.C. 1437 et seq.).
`(c) EXCESS RENT AMOUNT- For purposes of this section--
`(1) IN GENERAL- The term `excess rent amount' means the excess (if any)
of--
`(A) the amount paid by the taxpayer for rent of a principal residence,
over
`(B) 30 percent of the modified adjusted gross income of the taxpayer.
`(2) MODIFIED ADJUSTED GROSS INCOME-
`(A) IN GENERAL- The term `modified adjusted gross income' means adjusted
gross income--
`(I) without regard to sections 86, 219, 221, 911, 931, and 933,
`(II) without regard to the amounts described in subparagraph (B),
and
`(ii) increased by the amounts described in subparagraph (C).
`(B) CERTAIN AMOUNTS DISREGARDED- An amount is described in this subparagraph
if it is--
`(i) an alimony or separate maintenance payment (as defined in section
71(b)),
`(ii) the amount of losses from sales or exchanges of capital assets
in excess of gains from such sales or exchanges to the extent such amount
does not exceed the amount under section 1211(b)(1),
`(iii) the net loss from estates and trusts,
`(iv) the excess (if any) of amounts described in section 32(i)(2)(C)(ii)
over the amounts described in section 32(i)(2)(C)(i) (relating to nonbusiness
rents and royalties), or
`(v) 75 percent of the net loss from the carrying on of trades or businesses,
computed separately with respect to--
`(I) trades or businesses (other than farming) conducted as sole proprietorships,
`(II) trades or businesses of farming conducted as sole proprietorships,
and
`(III) other trades or businesses.
For purposes of clause (v), there shall not be taken into account items
which are attributable to a trade or business which consists of the performance
of services by the taxpayer as an employee.
`(C) CERTAIN AMOUNTS INCLUDED- An amount is described in this subparagraph
if it is--
`(i) interest received or accrued during the taxable year which is exempt
from tax imposed by this chapter,
`(ii) amounts received as a pension or annuity, and any distributions
or payments received from an individual retirement plan, by the taxpayer
during the taxable year to the extent not included in gross income,
`(iii) amount received under, or paid on behalf of the taxpayer under,
any program receiving Federal, State, or local government funds if eligibility
for, or the amount or type of, benefits or assistance under the program
is based, in whole or in part, on need, or
`(iv) the amount of social security benefits (as defined in section
86(d)) received during the taxable year.
Clause (ii) shall not include any amount which is not includible in gross
income by reason of a trustee-to-trustee transfer or a rollover distribution.
`(d) OTHER DEFINITIONS AND SPECIAL RULES- For purposes of this section--
`(1) PRINCIPAL RESIDENCE- The term `principal residence' shall have same
meaning as when used in section 121.
`(2) TREATMENT OF EXPENSES PAID BY DEPENDENT- If a deduction under section
151 with respect to an individual is allowed to another taxpayer for a taxable
year beginning in the calendar year in which such individual's taxable year
begins, no credit shall be allowed under subsection (a) to such individual
for such individual's taxable year.
`(3) MULTIPLE TAXPAYERS RENTING THE SAME PRINCIPAL RESIDENCE- This section
shall be applied to separately to the portion of the rent paid by an individual
to rent the same principal residence with 2 or more taxpayers.
`(4) ELDERLY AND HANDICAPPED DEPENDENTS- In the case of a dependent for
whom the taxpayer is allowed an exemption under section 151 who--
`(A) has attained age 65 before the close of the taxable year, or
`(B) retired on disability before the close of the taxable year and who,
when he retired, was permanently and totally disabled (within the meaning
of section 22(e)(3)),
the principal residence taken into account under this section shall be the
principal residence of such dependent.
`(e) DENIAL OF CREDIT IF MORTGAGE INTEREST DEDUCTION ALLOWED- No credit shall
be allowed under this section for a taxable year for a taxpayer for whom deduction
under section 163(h) is allowable for the taxable year.'.
(b) TECHNICAL AMENDMENTS-
(1) Paragraph (2) of section 1324(b) of title 31, United States Code, is
amended by inserting `or from section 35 of such Code' before the period
at the end.
(2) The table of sections for such subpart C is amended by striking the
item relating to section 35 and inserting the following new items:
`Sec. 35. Credit for rent in excess of 30 percent of income.
`Sec. 36. Overpayment of taxes.'
(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable
years beginning after December 31, 2001.
END