On March 3, 2016, in an effort to lighten the financial tax burdens on middle class Americans residing in covenant controlled communities, Congresswoman Anna Eshoo (D-CA) and Congressman Mike Thompson (D-CA) introduced the “Helping Our Middle-Income Earners (HOME) Act.” The purpose of the HOME Act is to amend the Internal Revenue Code to allow homeowners residing in covenant controlled communities to deduct association assessments and fees in an effort to minimize federal tax liability.
The HOME Act proposes that homeowners residing in covenant controlled communities who make less than $115,000 in annual income be allowed to deduct up to $5,000 of association fees and assessments paid in the tax year. The assessments and fees must be “qualified homeowner association assessments,” meaning they are:
- regularly occurring;
- mandatory (other than a special assessment);
- paid by a taxpayer to a homeowner’s association with respect to the taxpayer’s principal residence;
- the payment benefits the taxpayer’s principal residence; and
- the obligation to pay stems from the taxpayer’s mandatory and automatic membership in the homeowners association.
The HOME Act was introduced in the House and has been referred to the House Committee on Ways and Means. A link to the full text of the proposed bill can be found here.
Contact your representative and urge them to co-sponsor the HOME Act!