Low-income renters in Hawaii could get increased tax credits going forward if a new proposal is approved. A Senate bill has recently been approved for recommendation in two Senate committees that could quadruple the proposed tax credit for renters in Hawaii. Along with raising the tax credit amount, the bill also expands the eligibility requirements to ensure the program covers more renters.
How Tax Credit For Renters In Hawaii May Quadruple
On Tuesday, the Hawaii Senate Ways and Means Committee unanimously recommended the bill (SB55) after minor revisions were approved by the Housing Committee recently.
The proposed bill recommends using income brackets to determine the eligibility for the tax credit for renters in Hawaii. Under the proposed income brackets, individual renters with income below $20,000 (and couples earning $40,000 or less) could get $200 in tax credit, compared to the current credit of $50.
Further, the bill also extends the eligibility to include individual renters with an adjusted gross income of $40,000 or less and head of households with an income $60,000 or less to get a credit of $100. Also, the bill allows seniors aged 65 and older to double their credit allowance to up to $400.
Additionally, the proposed legislation wants the state to increase the tax credit for renters in Hawaii more often.
“Renters in Hawaii spend over forty percent of their income on rent, which means Hawaii is the only state in the country where the average renter is cost-burdened according to the United State Department of Housing and Urban Development,” said House Committee Chair and Senator Stanley Chang.
Is There A Need?
If approved, this bill (SB55) would drastically change the tax credit structure for low-income renters. An overhaul to the tax credit structure is long overdue. The current legislation on the tax credit was last updated in 1989, and it caps the income threshold for renters at $30,000.
The proposed bill enjoys the support of several community leaders and organizations. Those in favor of the bill believe that it would offer much needed relief to renters that are facing financial challenges due to inflation.
Further, supporters argue that the new tax credit could immensely benefit families with children. For instance, under the current tax credit structure, a single mom with two children and an annual income of $35,000 would not qualify for the renters’ credit. But, under the proposed legislation, she would be able to claim a few hundred dollars.
Apart from this proposed legislation, lawmakers in the state are considering other solutions for affordable housing as well. Housing is a top priority for Democratic Governor Josh Green, who has proposed many legislation and budgeting solutions to address the housing crisis in the state.
“Hawaii’s housing crisis has reached a state of emergency,” Green states on the official Governor’s website. “It’s an issue that impacts us all in some way, touching almost every other major challenge we face as a state.”
This article originally appeared on ValueWalk
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