The Tax Relief for Renters Act of 2026 creates a new tax deduction for people who rent their primary residence. Under this bill, renters can deduct up to one-twelfth of their annual rent payments, capped at $4,000 per year, directly from their taxable income. The deduction is available to all renters regardless of whether they itemize deductions on their tax return, but it phases out for higher-income individuals: those earning over $75,000 (or $125,000 for joint filers) become ineligible. The deduction amounts will automatically adjust for inflation each year after 2027, rounded to the nearest $100. The bill takes effect for tax years beginning after December 31, 2026.
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