The Housing COST Act creates a new federal tax credit for renters to help offset housing costs. Eligible renters would receive a credit of 8.5 to 11 percent of their rent payments, depending on the number of dependents they have, with a maximum credit of $4,000 per year. The credit applies only to taxpayers with adjusted gross income under $150,000 and only covers rent up to the fair market rent rates set by the Department of Housing and Urban Development.
Starting in 2027, renters can claim this credit when filing their taxes, and the bill establishes an advance payment program allowing eligible taxpayers to receive monthly payments beginning as early as July 2027 rather than waiting until they file their tax return. The Treasury Department must launch a public outreach campaign to inform renters about the credit and work with state and local governments and community organizations to help people enroll. The credit expires after December 31, 2034, making it a temporary measure rather than a permanent tax policy change.