H.R. 10613: Housing Cost of Living Support for Tenants Act of 2026

This bill would create a new federal renter tax credit for people who lease their principal residence (their main home). The credit would reduce a person’s federal income tax, and in some cases it could be paid out in advance during the year.

What the credit would do

A renter could claim a credit equal to a set percentage of the rent they paid for their main home during the year. The percentage would depend on how many dependents the taxpayer has:

• 1 dependent: 8.5%
• 2 dependents: 9%
• 3 dependents: 9.5%
• 4 dependents: 10%
• 5 dependents: 10.5%
• 6 or more dependents: 11%

The credit could be worth up to $4,000 per year.

Limits on who qualifies

• The credit would only apply to rent paid for a person’s principal residence.
• Only rent up to the level of the area’s HUD small area fair market rent would count for the credit. In other words, if a tenant pays rent above that benchmark, the extra amount would not increase the credit.
• People with adjusted gross income above $150,000 in the prior year would not be eligible.

How rent is defined

For this credit, “rent” would also include certain utility payments if those utilities are the kind counted in housing allowance calculations under existing tax rules.

Special rules

• If a taxpayer lives in the home for only part of the year, the Treasury Department would issue rules for how the credit works in that situation.
• For married couples who live together but file separate tax returns, the credit would generally be split 50/50, unless they choose a different split that still does not exceed 100% total.
• A dependent would be treated as a dependent for purposes of this credit if the tax code already treats that person as a dependent.

Advance monthly payments

The bill would require the Treasury Department to create a program to let eligible taxpayers receive the credit in monthly advance payments rather than waiting until they file their tax return. A taxpayer would have to elect this option on a timely filed return for the prior year.

The monthly advance amount would generally be based on the expected annual credit divided by 12, unless the taxpayer elects a different amount. If the advance payments end up being larger than the final credit amount, the taxpayer’s tax bill for that year would be increased by the excess.

Implementation and outreach

The IRS would have to notify eligible taxpayers about the availability of advance payments. The Treasury Department would also have to carry out an outreach program to make people aware of the credit, including possible coordination with state, local, tribal, and territorial governments, as well as private organizations that help people prepare tax returns.

When it would take effect

The credit and related rules would apply to taxable years beginning after December 31, 2026. The credit would end for taxable years beginning after December 31, 2034.

Relevant Companies

None found