Renters tax credit

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45S.

Renters credit

(a)

In general

For purposes of section 38, in the case of a qualified credit recipient, the renters credit for any taxable year is an amount equal to the sum of the renter’s credit amounts allocated to such qualified credit recipient under this section for months ending during the taxable year. (b)

Renter’s credit amount

(1)

In general

For purposes of this section, the term renters credit amount means the rent reduction amount with respect to each rental unit which is occupied by a qualified renter. (2)

Qualified renter

For purposes of this section, the term qualified renter means a family unit with income not greater than the higher of— (A)60 percent of local median income, or (B)150 percent of the Federal poverty line,

in each case as determined by the Secretary of Housing and Urban Development for a family of the size involved.

(3)

Rent reduction amount

For purposes of this section— (A)

In general

The term rent reduction amount is the amount by which the fair market rent for the unit involved exceeds the rent charged to the qualified renter. (B)

Limitation

The rent reduction amount taken into account under this section shall not exceed the excess of— (i)the rent charged to the qualified renter (or, if lower, specified modest rent), over (ii)30 percent of the qualified renter’s income (prorated monthly) as determined by the renters credit agency of the State. (C)

Specified modest rent

The term specified modest rent means— (i)the Fair Market Rent determined by the Secretary of Housing and Urban Development for the zip code (if the unit is located in a metropolitan area) or non-metropolitan county, or (ii)such amount as may be determined by the State with respect to the area in which the unit is located if such amount is within 25 percent of the amount determined under clause (i) with respect to such unit. (D)

Utilities

The renters credit agency of the State may determine whether and how to take into account the cost of utilities in determining the rent reduction amount. (E)

Credit adjustment

The renters credit agency of the State may elect to increase the rent reduction amount such that such amount does not exceed 110 percent of such amount as determined without regard to this subparagraph. (c)

Qualified credit recipient

For purposes of this section, the term qualified credit recipient means, with respect to any rental unit occupied by a qualified renter, the owner of such unit but only to the extent of the renters credit amounts which have been allocated to such person by the renters credit agency. In lieu of the owner of the unit, the renters credit agency may treat the lender of any loan to such owner as the qualified credit recipient if such unit secures such loan. (d)

Allocations by renters credit agency to credit recipients

(1)

In general

The renters credit agency may make allocations of renters credit amounts to qualified credit recipients under this section on the basis of— (A)the identity of the qualified renter, such that the renters credit amount is allowed to the owner of any rental unit which such qualified renter occupies (or the lender referred to in subsection (c)) for any month, or (B)one or more rental units, such that the renters credit amount is allowed to the owner of such units (or the lender referred to in subsection (c)) for such months as such units are occupied by a qualified renter. (2)

Restrictions on unit based allocations

A renters credit agency may make allocations of renters credit as described in paragraph (1)(B) only if— (A)such units are part of a project or building in which not more than 40 percent of the units receive allocations under this section (the Secretary may provide such exceptions to the requirement of this subparagraph as the Secretary determines appropriate for small buildings or buildings with respect to which more than 40 percent of the units were previously subsidized under other Federal programs), and (B)the Secretary has approved a mobility plan submitted by such renters credit agency which provides for an adequate method to ensure that qualified renters have the ability to move from a unit which is eligible for credit under this section without losing the rent subsidy provided by this section. (e)

Allocations of credit authority to State agencies

(1)

Renters credit dollar amount for agencies

(A)

State limitation

The aggregate credit amounts which a renters credit agency may allocate for any calendar year is the portion of the State renters credit ceiling allocated under this paragraph for such calendar year to such agency. (B)

State ceiling initially allocated to State housing credit agencies

Except as provided in subparagraphs (D) and (E), the State renters credit ceiling for each calendar year shall be allocated to the renters credit agency of such State. If there is more than 1 renters credit agency of a State, all such agencies shall be treated as a single agency. (C)

State renters credit ceiling

The State renters credit ceiling applicable to any State and any calendar year shall be an amount equal to the sum of— (i)the unused State renters credit ceiling (if any) of such State for the preceding calendar year, (ii)the greater of— (I)$17.50 multiplied by the State population, or (II)$20,000,000, (iii)the amount of State renters credit ceiling returned in the calendar year, plus (iv)the amount (if any) allocated under subparagraph (D) to such State by the Secretary.

For purposes of clause (i), the unused State renters credit ceiling for any calendar year is the excess (if any) of the sum of the amounts described in clauses (ii) through (iv) over the aggregate renters credit dollar amount allocated for such year.

(D)

Unused renters credit carryovers allocated among certain States

(i)

In general

The unused renters credit carryover of a State for any calendar year shall be assigned to the Secretary for allocation among qualified States for the succeeding calendar year. (ii)

Unused renters credit carryover

For purposes of this subparagraph, the unused renters credit carryover of a State for any calendar year is the excess (if any) of— (I)the unused State renters credit ceiling for the year preceding such year, over (II)the aggregate renters credit dollar amount allocated for such year. (iii)

Formula for allocation of unused housing credit carryovers among qualified States

The amount allocated under this subparagraph to a qualified State for any calendar year shall be the amount determined by the Secretary to bear the same ratio to the aggregate unused renters credit carryovers of all States for the preceding calendar year as such State's population for the calendar year bears to the population of all qualified States for the calendar year. For purposes of the preceding sentence, population shall be determined in accordance with section 146(j). (iv)

Qualified State

For purposes of this subparagraph, the term qualified State means, with respect to a calendar year, any State— (I)which allocated its entire State renters credit ceiling for the preceding calendar year, and (II)for which a request is made (not later than May 1 of the calendar year) to receive an allocation under clause (iii). (E)

Application of certain rules

For purposes of this paragraph, rules similar to the rules of subparagraphs (E), (F), and (G) of section 42(h)(3) shall apply. (F)

Inflation adjustment

(i)

In general

In the case of a calendar year after 2013, the $20,000,000 and $17.50 amounts in subparagraph (C) shall each be increased by an amount equal to— (I)such dollar amount, multiplied by (II)the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2001 for calendar year 1992 in subparagraph (B) thereof. (ii)

Rounding

(I)In the case of the $20,000,000 amount, any increase under clause (i) which is not a multiple of $50,000 shall be rounded to the next lowest multiple of $50,000. (II)In the case of the $17.50 amount, any increase under clause (i) which is not a multiple of 50 cents shall be rounded to the next lowest multiple of 50 cents. (f)

Other definitions

For purposes of this section— (1)

Renters credit agency

The term renters credit agency means, with respect to any State, the housing credit agency of such State (as defined in section 42(h)(8)(A)) or such other agency as is authorized to carry out the activities of the renters credit agency under this section. (2)

Possessions treated as States

The term State includes a possession of the United States. (g)

Regulations

The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.

(b)

Credit To be part of general business credit

(1)

In general

Subsection (b) of section 38 of such Code is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , plus, and by adding at the end the following new paragraph:

(37)the renters credit determined under section 45S(a).

(2)

Credit allowable against alternative minimum tax

Subparagraph (B) of section 38(c)(4) of such Code is amended by redesignating clauses (vii) through (ix) as clauses (viii) through (x), respectively, and by inserting after clause (vi) the following new clause:

(vii)the credit determined under section 45S,

(c)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

Sec. 45S. Renters credit.

(d)

Effective date

The amendments made by this section shall apply to allocations made for calendar years after 2014 and to taxable years ending after December 31, 2014.