HB1985
To Create The Arkansas Renter Refund Act; And To Provide An Income Tax Credit For Certain Taxpayers Who Are Residential Tenants.
Last Action (May 5, 2025): Died in House Committee at Sine Die adjournment.
Sponsors
AI-Generated Summary
House Bill 1985, titled the 'Arkansas Renter Refund Act,' proposes an amendment to the Arkansas Code to provide a $500 income tax credit for certain residential tenants. To qualify for the credit, a taxpayer must rent their primary residence for the entire tax year, have a net income of less than $40,000, and not be claimed as a dependent on another person's tax return. The credit is non-refundable, meaning the amount claimed cannot exceed the total income tax liability owed by the taxpayer for that year. If enacted, these provisions would apply to tax years beginning on or after January 1, 2025.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries are low-to-middle income residential tenants in Arkansas who earn less than $40,000 annually, reside in a rental property for the full duration of the tax year, and are not claimed as dependents on another taxpayer's return. These individuals would see a potential reduction in their state income tax burden of up to $500.
Who Might Suffer?
The primary entity negatively impacted is the State of Arkansas, which would experience a reduction in general tax revenue due to the implementation of the tax credit. Additionally, taxpayers who do not meet the strict residency or income requirements, or who have no income tax liability against which to apply the credit, will not receive the financial benefit.
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