Renter’s Tax Fairness Act by Brian Frydenborg

Legislation Proposal by Brian Frydenborg, Democratic Party candidate for U.S. Senate For Maryland, July 14, 2023

  1. Per household, on federal tax filings, filers can deduct the median yearly rent cost for their county up to a certain level depending on their filing income level. 
  2. For those making $50,000 or less of any income type: 100% of median yearly rent is deductive from taxable income and there is a refundable tax credit (like the earned income tax credit) equal to 20% of this.  This will be called the Renter’s Tax Credit (RTC).
  3. For those making $70,000 or less of income type:  65% of median yearly rent, with 10% of this amount available as a refundable tax credit.
  4. For married couples not filing jointly or groups of people paying a single rent together this applies to the percentage of the overall benefit that is the percentage they contribute to the shared rent.  If Spouse or Renter 1 pays 40% of rent and Spouse or Renter 2 pays, 60%, Spouse or Renter 1 will get 40% of the tax deduction and 40% of refundable tax credit available for the household, Spouse or Renter 2 60% of each.
  5. Undergraduate college, including trade school and community college, students who are dependents can have their filers claim an additional credit per dependent attending classes if they are not living with their filers claiming them as dependents and they are attending classes in person for a majority of their academic term on campuses in the United States.  If filer pays a portion of dependent’s rent, then that will be the portion of the deduction and credit the filer can claim. This will be the equivalent of median county rental rates not specifically on-campus housing rental rates.  Graduate degrees dependents are not eligible.
  6. Per filer, only one property at a time may be used to claim the deduction and the credit.
  7. If a filer changes residence or owns multiple properties, the residence must the one in which the filer is residing and that rate will be claimed for the portion of the year that residence is residing.  For Americans living abroad, a filer may deduct and claim a credit to the equivalent of 35% what they would claim if their rent was the overall median U.S. national rent.  The only applies to the portion of the time the person is residing abroad.
  8. If the filer changes residency and is not paying rent in their current residency, the deduction and credit can still apply to their most recent residency where they were paying rent if they are still paying rent at this previous place of residency.
  9. All figures used for calculations will be based on the previous tax year count mediums or national mediums for those living abroad.
  10. The IRS will create a calculator that works along the same lines as the EITC for the RTC.

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