On March 3, 2016, Congresswoman Anna Eshoo and Congressman Mike Thompson introduced Bill H.R. 4696, which can be cited as “Helping Our Middle-Income Earners Act” or the “HOME Act.” This bill is currently in the House Committee on Ways and Means. If enacted, the HOME Act will amend the Internal Revenue Code of 1986 to allow tax deductions to individual taxpayers for homeowners association assessments. This tax deduction will be an income based deduction, not to exceed $5,000 for the taxable year, for “qualified homeowners association assessments” paid by the individual taxpayer during the taxable year.

The HOME Act defines “qualified homeowners association assessments” as, “regularly occurring, mandatory financial assessments (other than a special assessment) – A) paid by a taxpayer to a homeowners association with respect to the taxpayer’s principal residence, B) that directly benefit the taxpayer’s principal residence and C) the obligation of which to pay arises from the taxpayer’s mandatory and automatic membership in such homeowners association.”

The HOME Act would require the homeowners associations that receive “qualified homeowners association assessments” to file an informational return that states the names, addresses and tax identification numbers of taxpayers from whom the association receives assessments and the amount of the assessments received during the calendar year. Almost none of the homeowners associations that our firm works with currently keep track of homeowners tax identification numbers. The HOME Act would require the homeowner to provide this information to the association and the association would be responsible for keeping track of this information.

According to one website, https://www.govtrack.us, a website dedicated to tracking Congress, the HOME Act has a 5% change of getting past the House Committee on Ways and Means, and a 1% change of being enacted. Factors considered to determine this prognosis include: the bill was referred to the Committee on Ways and Means, the sponsor of the bill is a member of the minority party, there is one co-sponsor outside of the majority party and at least one co-sponsor from the majority party.

Our firm will continue to update you as we follow this bill through the legislative process. To view the full text of H.R. 4696 please click here: H.R. 4696 Text.