The bipartisan tax bill passed by the U.S. House of Representatives on January 31 (see Memo 2/5) has yet to reach the U.S. Senate or the Senate’s Committee on Finance. The bill includes an important benefit for low-income families – an expansion of the Child Tax Credit (CTC) – but does not include key reforms to the Low-Income Housing Tax Credit (LIHTC). Take action to urge your Senators to include reforms to LIHTC in the bill so the credit better serves extremely low-income households, including those experiencing homelessness.
If passed, the “Tax Relief for American Families and Workers Act of 2024” (H.R. 7024) would enhance the Child Tax Credit, expand business tax credits for research and development, support communities impacted by disasters with small business tax credits, end a pandemic-era employee retention tax credit, and expand LIHTC. In the case of LIHTC expansion, the tax bill would restore a temporary 12.5% increase and support the use of private activity bonds to finance affordable housing. However, expanding LIHTC without making key reforms will leave LIHTC-supported homes unaffordable for the people who need them most. NLIHC will continue monitoring the legislation as it moves to the U.S. Senate and keep calling on advocates to urge their Senators to adopt key reforms in any expansion of LIHTC.
LIHTC is the nation’s primary source of financing for the construction and preservation of affordable housing. However, on its own, the tax credit rarely suffices to support the building or preservation of homes affordable to households with the greatest needs. LIHTC is targeted to build homes affordable to households earning up to 50% or 60% of the area median income. As a result, extremely low-income households can generally only afford rent in a LIHTC development if they receive rental assistance. The majority (58%) of extremely low-income renters living in LIHTC developments who do not receive rental assistance are severely cost burdened, paying more than half their limited incomes on rent. One emergency or unexpected expense can send these households into homelessness.
Read the text of the “Tax Relief for American Families and Workers Act of 2024” here.
Read NLIHC’s statement on the tax bill here.
Read NLIHC President and CEO Diane Yentel’s tweet thread on the bill here.