Tax time is approaching quickly, and students are gathering their W2’s and sharpening their pencils (or calling their parents). Although filling out taxes is a general bore, there is a little-known perk to renting in Minnesota. It’s called the Renters’ Property Tax Refund, or the Renters’ Credit. According to Minnesota tax law, some tenants in Minnesota are eligible to receive up to 19 percent of the rent they paid each year. According to the government’s statistics, the percentage certainly isn’t pocket change. The average return in 2005 was $524.
However, there is a catch. Actually, there are several catches. For renters to be eligible, they must not be claimed as a dependent on anyone’s tax returns. Also, tenants must rent from a tax-paying person or entity. For example, students living in the residence halls are ineligible
because the University is tax-exempt. Furthermore, renters who make more than $49,160 are ineligible for the refund.
In order to file for a refund, tenants must also submit a Certificate of Rent Paid. This is a form that landlords are required to give to renters by Jan. 31 each year. If you haven’t received the form yet, you might not want to delay. The filing deadline is Aug. 15 each year, and some landlords are notorious for their sloth-like characteristics. Tenants can file their claim before the Aug. 15 deadline, but refund payouts don’t start until the end of August – just in time to buy textbooks.
In order to claim the refund, people must file using a Minnesota Department of Revenue Schedule M1PR. In plain English, it’s called a M1PR form. The form is available online at http://www.taxes.state.mn.us/taxes.
This is a great tax break for students and other renters in Minnesota. In 2005, when the words “state budget” were closely followed by the word “shortfall,” legislators took aim at the Renters’ Credit. Luckily for students and other low-income tenants, a sizable opposition rallied to keep the credit alive.