This bill creates a new federal tax deduction for rent paid on a primary residence. The text states the deduction is equal to 1/12 of the taxpayer's qualified rent expenses for the taxable year. "Qualified rent expenses" are amounts paid or incurred to lease the taxpayer's primary residence. The deduction cannot exceed $4,000 per individual in any taxable year. The deduction is not allowed if the taxpayer's adjusted gross income (AGI) is above specified thresholds: $125,000 for joint returns or surviving spouses, $85,000 for married filing separately, $80,000 for heads of household, and $75,000 for other individuals. Dollar limits are adjusted for inflation for taxable years beginning after 2027, with rounding to the nearest $100. The bill also allows the deduction for taxpayers who do not itemize and specifies the deduction is not treated as a miscellaneous itemized deduction. The effective date is for taxable years beginning after December 31, 2026.
If passed as written, renters who lease a primary residence could claim a federal deduction based on the rent they paid, subject to the 1/12 specification in the text and the $4,000 per-person cap. People with AGI above the listed thresholds would not be eligible. The deduction would be available to taxpayers who take the standard deduction (non-itemizers) and to itemizers without being classified as a miscellaneous itemized deduction. The changes would apply starting with tax years after December 31, 2026.
No publicly available information on estimated effects on federal revenue or administrative costs is included in the bill text or provided metadata.
No publicly available information on proponents' stated reasons or arguments is included in the bill text or provided metadata.
No publicly available information on opponents' stated reasons or arguments is included in the bill text or provided metadata.