Overview
Title
To amend the Internal Revenue Code of 1986 to establish a refundable tax credit for the addition of skirting to certain manufactured homes.
ELI5 AI
H.R. 9935 wants to give people money back when they put a special cover around their mobile homes to make them warmer in winter and cooler in summer, but they can only get up to $500 back and need to earn less than some big numbers to qualify.
Summary AI
H.R. 9935 proposes an amendment to the Internal Revenue Code of 1986 to introduce a refundable tax credit. This credit, amounting to 20% of the costs, is available to individuals who pay for skirting on certain manufactured homes during the tax year. However, the credit cannot exceed $500 and is only available to taxpayers with a modified adjusted gross income of $300,000 or less for joint returns, and $150,000 or less for others. The bill aims to encourage adding skirting, which is weather-resistant material that encloses the space beneath manufactured homes, thereby potentially reducing energy costs for homeowners.
Published
Keywords AI
Sources
Bill Statistics
Size
Language
Complexity
AnalysisAI
General Summary of the Bill
The proposed legislation, titled the "Lowering Energy Costs for Manufactured Homeowners Act," aims to amend the Internal Revenue Code of 1986 by establishing a refundable tax credit. This credit is specifically for taxpayers who add skirting to their manufactured homes. Eligible individuals can claim a tax credit equal to 20% of their skirting expenses during a given year, with a maximum credit limit of $500. However, this benefit is subject to income limitations—specifically, individuals with a modified adjusted gross income exceeding $150,000, or $300,000 for those filing jointly, would not qualify. This tax incentive begins to apply to tax years starting after December 31, 2024.
Summary of Significant Issues
Several potential issues have been identified with the bill. One of the major concerns is the $500 cap on the tax credit, which may not cover enough of the skirting expenses to make a meaningful impact on energy efficiency for homeowners. There is also worry that the bill's income limitations might favor higher-income individuals, as the thresholds are set relatively high. This may lead to equity concerns, as those who might most benefit from the credit may be excluded due to their geographic location's cost of living or owning more than one property.
Moreover, the outlined definition of 'manufactured home skirting expenses' could be too broad, allowing for misinterpretation and potential misuse. Additionally, the requirement that a manufactured home must be used as a primary residence, and that it must be built after 1976, could exclude some homeowners who would otherwise qualify. Lastly, the lack of clarity on what qualifies as 'weather-resistant material' and the absence of clear procedures to determine a 'primary residence' might lead to enforcement difficulties.
Potential Public Impact
This bill is designed with the intention of providing financial relief and incentivizing energy efficiency improvements among owners of manufactured homes. Overall, by reducing energy costs, it aims to offer support to individuals who may struggle with high utility bills. However, its effectiveness in achieving these goals might be reduced due to the aforementioned limitations and ambiguities.
For the general public, the introduction of such a credit could increase awareness about the benefits of energy-efficiency improvements. Yet, for those who do not qualify for the credit due to income, housing characteristics, or location, the financial benefits might remain out of reach.
Impact on Specific Stakeholders
The bill may positively impact homeowners of manufactured homes who are able to take advantage of the credit, specifically those who fall within the income range and have qualifying homes. These individuals might see a reduction in their energy costs thanks to improvements funded by the credit.
On the other hand, the high-income thresholds for eligibility might skew the benefits towards middle-to-upper-income households, excluding those in high-cost living areas who might not meet the criteria despite having similar financial circumstances. Homeowners with properties built before 1976, retirees who own seasonal homes, or those simply outside designated eligibility due to income caps may not benefit, raising concerns over fairness and inclusivity.
Discussions stirred by this bill might encourage the exploration of more comprehensive programs or policies to aid homeowners across a wider spectrum of needs, possibly fostering a more holistic approach to energy efficiency and economic relief in the residential sector.
Financial Assessment
The legislation, H.R. 9935, suggests creating a refundable tax credit to encourage homeowners of manufactured homes to invest in skirting, a type of weather-resistant material. This investment can be financially beneficial by potentially reducing energy costs. The credit allows individuals to deduct up to 20% of the skirting costs from their tax liabilities, with a cap set at $500. This limit directly addresses spending related to skirting but caps the financial incentive, which might reduce its effectiveness, as the actual costs for such improvements can be significantly higher.
This financial arrangement intends to make energy-saving renovations more appealing. However, the fact that the tax credit is capped at $500 might be insufficient to cover substantial improvement costs. This limitation could lessen the incentive for homeowners to undertake the addition of skirting, particularly if the expenses substantially exceed the cap. The bill specifies a maximum modified adjusted gross income of $300,000 for joint filers and $150,000 for others to qualify for this credit, which introduces income-based eligibility.
One contentious issue arising from this is the relatively high-income ceiling set for joint filers, which could result in more affluent individuals benefiting disproportionately from the credit compared to those with lower incomes. This could raise equity concerns, as it implies that higher-earning households might have more access to the benefit envisaged by this credit despite being less in need of the financial support.
Additionally, the bill's approach does not seem to consider regional differences in living costs, which might affect eligibility unfairly. Households in higher-cost areas, where incomes are generally greater but purchasing power is lower, could be inadvertently excluded from this aid. This fails to address the varying financial landscapes across different regions, potentially leaving some households without support, despite genuine need.
Another critical point is that the bill limits eligibility to those whose manufactured home serves as their primary residence. While targeting primary residences may focus the incentive more tightly, it also excludes those with secondary or seasonal homes, such as retirees. This provision, therefore, narrows the scope of potential beneficiaries, possibly limiting the legislation's impact on broader community welfare.
Lastly, the financial stipulations do not clearly define what qualifies as "weather-resistant material," which could lead to misunderstanding. This vagueness could pose enforcement challenges and encourage noncompliance, potentially leading to claims for non-qualifying expenses.
In summary, while the financial references in H.R. 9935 aim to incentivize energy-efficient home improvements, their limited scope and the exclusionary eligibility criteria might not fully achieve the intended widespread benefits.
Issues
The definition of 'manufactured home skirting expenses' may be too broad in Section 2(c)(1), leaving room for interpretation and potential misuse, which could result in taxpayers claiming credits for ineligible expenses.
The $500 cap on the credit for manufactured home skirting expenses in Sections 2(b)(2) and 36C(a) may not be sufficient to cover significant costs, potentially limiting the effectiveness of the credit in encouraging energy efficiency improvements.
The income limitation for joint filers is set relatively high at $300,000 in Section 2(b)(1)(A), which might disproportionately benefit higher-income individuals, potentially raising equity concerns over who benefits from the tax credit.
The limitation based on modified adjusted gross income might not account for regional cost-of-living variations in Section 2(b)(1), potentially unfairly excluding taxpayers in high-cost areas from availing the credit.
The requirement that the manufactured home be used as the primary residence in Section 2(c)(2)(C) could exclude individuals who own more than one property, such as retirees or those with seasonal homes, which could be seen as unfairly reducing the pool of potential beneficiaries.
The definition of a 'qualifying manufactured home' in Section 2(c)(2) might inadvertently exclude homes built before 1976, which could be seen as outdated and unintentionally discriminatory.
There is a lack of clarity about what constitutes 'weather-resistant material' in Section 2(c)(3), leading to potential ambiguity in qualifying skirting expenses and enforcement difficulties.
The bill does not specify procedures for determining 'primary residence' in Section 2(c)(2)(C), which could lead to inconsistent applications of the credit and confusion for taxpayers.
It is unclear if there are any reporting or proof requirements for verifying that the skirting expenses were indeed incurred in Section 36C, which could lead to ambiguity in enforcement and compliance, raising concerns about the potential for fraud.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill provides its official name as the "Lowering Energy Costs for Manufactured Homeowners Act."
2. Refundable credit for manufactured home skirting expenses Read Opens in new tab
Summary AI
The bill introduces a tax credit for manufactured home skirting expenses, allowing individuals to claim 20% of these expenses, up to $500, as a tax credit if their income does not exceed $150,000 for single filers or $300,000 for joint filers. This credit applies only to skirting for qualifying manufactured homes used as a primary residence, effective for tax years starting after December 31, 2024.
Money References
- “(1) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.—Subsection (a) shall not apply to any taxpayer for any taxable year if the taxpayer’s modified adjusted gross income (as defined in section 36(b)(2)(B)) exceeds— “(A) in the case of a joint return, $300,000, and “(B) in any other case, $150,000. “
- (2) DOLLAR LIMIT ON AMOUNT CREDITABLE.—The aggregate amount of the credit allowed under subsection (a) with respect to any taxpayer shall not exceed $500.
36C. Credit for manufactured home skirting expenses Read Opens in new tab
Summary AI
In this section, individuals can receive a tax credit equal to 20% of the expenses incurred for adding skirting to a qualifying manufactured home during the taxable year, with a maximum credit of $500. However, this credit is not available if the individual's income exceeds $300,000 for joint returns or $150,000 for others, and it applies only to primary residences built after 1976 that meet specific criteria.
Money References
- — (1) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.—Subsection (a) shall not apply to any taxpayer for any taxable year if the taxpayer’s modified adjusted gross income (as defined in section 36(b)(2)(B)) exceeds— (A) in the case of a joint return, $300,000, and (B) in any other case, $150,000. (2) DOLLAR LIMIT ON AMOUNT CREDITABLE.—The aggregate amount of the credit allowed under subsection (a) with respect to any taxpayer shall not exceed $500.