[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2338 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 2338
To amend the Internal Revenue Code of 1986 to allow a refundable credit
against the income tax for the amount paid in rent in excess of 30
percent of income.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 27, 2001
Mr. Engel (for himself, Ms. Eddie Bernice Johnson of Texas, Mr. Filner,
Mr. Lantos, Mr. Hinchey, Mr. Jackson of Illinois, Mr. Payne, Mr.
Nadler, Ms. McKinney, Mr. Pascrell, Mr. Owens, Mr. Serrano, Mr.
Pallone, Ms. Waters, Mr. Kucinich, Mr. Towns, Mr. Sanders, Mr. Meeks of
New York, and Mr. Honda) introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow a refundable credit
against the income tax for the amount paid in rent in excess of 30
percent of income.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Renters Relief Act of 2001''.
SEC. 2. REFUNDABLE CREDIT FOR RENT IN EXCESS OF 30 PERCENT OF INCOME.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to refundable credits)
is amended by redesignating section 35 as section 36 and by inserting
after section 34 the following new section:
``SEC. 35. CREDIT FOR RENT IN EXCESS OF 30 PERCENT OF INCOME.
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the excess rent amount paid by
the taxpayer during the taxable year.
``(b) Limitations.--
``(1) Dollar limitation.--The amount of the credit
allowable under subsection (a) for a taxable year shall be not
exceed $2,500.
``(2) Phaseout.--
``(A) In general.--For purposes of this section,
the $2,500 amount referred to in paragraph (1) shall be
reduced (but not below zero) by an amount equal to $25
multiplied by the number of percentage points (or
fraction thereof) by which the taxpayer's modified
adjusted gross income for the taxable year exceeds 80
percent of the area median income applicable to such
taxpayer based on family size.
``(3) Special rule for taxpayers subject to more than one
area median income in a taxable year.--For purposes of
paragraph (2), in the case of a taxpayer who is subject to more
than 1 area median income in the taxable year by reason of
changes in family size or location of personal residence, the
area median income applicable to such taxpayer--
``(A)(i) shall be determined as of the first day of
each month on the basis of such family size and
location, and
``(ii) shall be \1/12\ of the area median income so
applicable, and
``(B) shall be the aggregate of the amounts
determined under subparagraph (A) for each month of the
taxable year.
``(4) Area median income.--For purposes of this subsection,
the term `area median income' means area median income as
determined by the Secretary of Housing and Urban Development
for purposes of the United States Housing Act of 1937 (42
U.S.C. 1437 et seq.).
``(c) Excess Rent Amount.--For purposes of this section--
``(1) In general.--The term `excess rent amount' means the
excess (if any) of--
``(A) the amount paid by the taxpayer for rent of a
principal residence, over
``(B) 30 percent of the modified adjusted gross
income of the taxpayer.
``(2) Modified adjusted gross income.--
``(A) In general.--The term `modified adjusted
gross income' means adjusted gross income--
``(i) determined--
``(I) without regard to sections
86, 219, 221, 911, 931, and 933,
``(II) without regard to the
amounts described in subparagraph (B),
and
``(ii) increased by the amounts described
in subparagraph (C).
``(B) Certain amounts disregarded.--An amount is
described in this subparagraph if it is--
``(i) an alimony or separate maintenance
payment (as defined in section 71(b)),
``(ii) the amount of losses from sales or
exchanges of capital assets in excess of gains
from such sales or exchanges to the extent such
amount does not exceed the amount under section
1211(b)(1),
``(iii) the net loss from estates and
trusts,
``(iv) the excess (if any) of amounts
described in section 32(i)(2)(C)(ii) over the
amounts described in section 32(i)(2)(C)(i)
(relating to nonbusiness rents and royalties),
or
``(v) 75 percent of the net loss from the
carrying on of trades or businesses, computed
separately with respect to--
``(I) trades or businesses (other
than farming) conducted as sole
proprietorships,
``(II) trades or businesses of
farming conducted as sole
proprietorships, and
``(III) other trades or businesses.
For purposes of clause (v), there shall not be taken
into account items which are attributable to a trade or
business which consists of the performance of services
by the taxpayer as an employee.
``(C) Certain amounts included.--An amount is
described in this subparagraph if it is--
``(i) interest received or accrued during
the taxable year which is exempt from tax
imposed by this chapter,
``(ii) amounts received as a pension or
annuity, and any distributions or payments
received from an individual retirement plan, by
the taxpayer during the taxable year to the
extent not included in gross income,
``(iii) amount received under, or paid on
behalf of the taxpayer under, any program
receiving Federal, State, or local government
funds if eligibility for, or the amount or type
of, benefits or assistance under the program is
based, in whole or in part, on need, or
``(iv) the amount of social security
benefits (as defined in section 86(d)) received
during the taxable year.
Clause (ii) shall not include any amount which is not
includible in gross income by reason of a trustee-to-
trustee transfer or a rollover distribution.
``(d) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Principal residence.--The term `principal residence'
shall have same meaning as when used in section 121.
``(2) Treatment of expenses paid by dependent.--If a
deduction under section 151 with respect to an individual is
allowed to another taxpayer for a taxable year beginning in the
calendar year in which such individual's taxable year begins,
no credit shall be allowed under subsection (a) to such
individual for such individual's taxable year.
``(3) Multiple taxpayers renting the same principal
residence.--This section shall be applied to separately to the
portion of the rent paid by an individual to rent the same
principal residence with 2 or more taxpayers.
``(4) Elderly and handicapped dependents.--In the case of a
dependent for whom the taxpayer is allowed an exemption under
section 151 who--
``(A) has attained age 65 before the close of the
taxable year, or
``(B) retired on disability before the close of the
taxable year and who, when he retired, was permanently
and totally disabled (within the meaning of section
22(e)(3)),
the principal residence taken into account under this section
shall be the principal residence of such dependent.
``(e) Denial of Credit if Mortgage Interest Deduction Allowed.--No
credit shall be allowed under this section for a taxable year for a
taxpayer for whom deduction under section 163(h) is allowable for the
taxable year.''.
(b) Technical Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``or from section 35 of
such Code'' before the period at the end.
(2) The table of sections for such subpart C is amended by
striking the item relating to section 35 and inserting the
following new items:
``Sec. 35. Credit for rent in excess of
30 percent of income.
``Sec. 36. Overpayment of taxes.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
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