The Rent Relief Act of 2025 creates a new tax credit for renters whose housing costs exceed 30 percent of their gross income. Under the bill, eligible individuals can claim a refundable tax credit starting in 2026, with the credit amount depending on income level—those earning under $25,000 receive 100 percent of excess rent costs, while those earning over $100,000 receive no credit. The credit is capped at the fair market rent rates set by the Department of Housing and Urban Development, and in high-cost areas designated by HUD, the income thresholds are increased by $25,000. Additionally, the bill establishes an advance payment program requiring the IRS to begin distributing monthly rent credits to eligible taxpayers within six months of enactment, allowing renters to receive relief throughout the year rather than waiting until tax filing. No specific funding amount is mentioned in the legislation, and the program becomes effective for tax years beginning after December 31, 2025.
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