Rent in California? You could benefit from this tax credit
What tax credit?
If you rent your home in California for at least six months of the year and make less than $43,533 (single filer) or $87,066 (filing jointly), you are eligible for the annual California renters’ credit. Today, the renters’ credit is $60 for single filers and $120 for joint filers. When the yearly tax credit was established decades ago, in 1972, it was meant to help tenants manage the cost of their rent.
But the last time this annual credit increased was in 1979.
That could change soon. A bipartisan-sponsored bill in California, Senate Bill 843 (SB843), aims to increase the tax credit. If it passes, California renters with low incomes would see the tax credit increase from:
- $60 → $500 (single filers making $43,533 or less)
- $120 → $1,000 (joint filers making $87,066 or less AND single parents of dependents)
Additionally, this would go into effect from 2022 through 2027, and eligible renters would be able to claim the total amount of the yearly credit during tax time—even if they owe taxes. From one of our members: “It would be nice to get the $1,000 tax credit. We’d save or use it for the kids’ clothes and shoes” –Evelyn D.
You may be asking yourself, “Why are lawmakers looking to increase this annual tax credit now?” As the nation continues to recover from the economic impact of the pandemic, many states were able to increase their revenues. More people are back at work, businesses are back in full swing, and statewide funding from the American Rescue Plan was distributed.
California has an opportunity to reinvest in its residents, particularly its renters, who have been historically overlooked as the cost of rent steadily increases—it’s quadrupled in the last 40 years. An estimated 2.4 million Californian renters could benefit from this bill if it passes.
Here’s what you can do
Here at SaverLife, we prioritize savings and wealth-building opportunities that benefit our members. This tax credit could help families pay for housing and build financial security for the future. So, while this bill is still under consideration, we need your help to advocate for Senate Bill 843 (SB843). Share how you could benefit from this expanded, yearly tax credit if the bill passes: