Last month, the DC Council took an important step to help low and moderate income families struggling with high housing costs. They did this by passing reforms to Schedule H, a refundable tax credit for DC residents that spend a particularly high portion of their incomes on property taxes. This tax credit is available to renters as well as homeowners, since renters pay property taxes, too, just indirectly through their rent. This makes the Schedule H tax credit an important tool to help all DC residents with housing challenges.
But one critical step remains before residents can take advantage of this help. Mayor Gray or the DC Council must allocate funding for the improvements to the Schedule H tax credit in the DC budget for Fiscal Year 2014.
The DC Council made the following changes to make the tax credit more effective:
Increasing the Number of Residents Who Can Get Help with High Housing Costs. The DC Council raised the income eligibility for Schedule H from $20,000 to $50,000, which would allow thousands of additional families to get help, including the vast majority of DC residents with severe housing burdens (spending more than half of their income on housing).
Increasing the Help Residents Can Receive. The DC Council increased the maximum annual credit from $750, which had not been adjusted since the 1970s, to $1,000. This will make Schedule H more effective at helping the most vulnerable families in the District.
Making it Easier for Eligible Families to Apply. The new legislation eliminated several cumbersome rules that made applying and qualifying difficult. These changes should help households get the tax benefits they are eligible for, and reverse the very low rate of participation in Schedule H
Improving DC’s low income property tax credit is an excellent way to target relief to District renters and homeowners who need it the most. Now, we just need to make sure that the District government provides the funding to make these improvements a reality.
