Taxes are due in 2 days so you might be thinking that it’s too late for any advice about how to get more back from the government. But you’d be wrong. By now you’ve probably either done your taxes by yourself using software like Turbotax or had it professionally prepared for you.
Whichever way you’ve gone about filing your taxes it’s quite possible that you’ve missed out on one of the biggest rebates available: renter’s property tax returns (RR). Most people (including myself until a few years ago) think that you have to own a home in order to receive a property tax refund. But the truth is that renter’s are also entitled to property tax returns since it is their money that is being used by the landlord to pay the property tax. You, as a renter, are entitled to a refund of a certain percentage of the rent you have paid over the past year. That percentage is determined by a number of factors, as these vary from state-to-state, but the primary factor is typically income. The less you make the more you’ll get back.
Every state in the US offers these returns, but the qualifications as well as the amount you’ll get back differ in each state. Tax preparation software like Turbotax does inform you about RR, but they do so in a way that is confusing and doesn’t make it obvious that you qualify. Part of the confusion comes from the fact that you have to print the RR and mail it separately from the rest of your tax return. The good news about RR is that they are not due on tax day. Usually the due date is months after the April due date for income taxes. For instance, in Minnesota RR forms aren’t due until August. And even if you miss the deadline it’s no big deal. In fact, you can claim RR for up to two years prior. So if you read this and decide to file a RR form this year make sure to search for the relevant forms for the previous two years and file those as well. You’ll probably be amazed at the amount of money you’ve been missing out on.
OK, enough preliminary information. Let’s get down to the nitty-gritty. How does one go about getting a RR? As I said, the process varies from state to state. I’ll use Minnesota’s process at an example. Most state’s will have a similar process. The first thing to do is to get your landlord to fill out a form called a ‘Certificate of Rent Paid’ (CRP). For MN this form can be found at:
Legally, all landlords in MN are required to provide you with this form even if you don’t ask for it. But most don’t so go ahead and ask them to fill one out or, if your landlord is especially lazy, print one off and send it to her. To make things simple let’s say that you paid $4,000 in rent in 2010. In that case line 3 of the CRP will be: 4,000 X .19 = 760. Next you have to fill out the official property tax refund form, called the M1PR in Minnesota. Here’s the link:
and here are the instructions (you’ll only need to consult them for one simple step):
Since you’re a renter you’ll be focusing on box 9 and 10 of the M1PR. Take the amount from line 3 of the CPR, in this case 760 and fill it in for line 9 of the M1PR. Now take a look at the instructions for the M1PR which include the income tables that allow you to determine what your refund will be. The numbers on the top row are the numbers from line 9 of the M1PR. In our example you’re looking for the number column that reads ‘at least 750 but less than 775’. The numbers on the side column are your income. Let’s say you made $12,000 last year (much more than most college students pull down in a year). So you want the row that says ‘at least 10,270 but less than 12,250’. OK, once you’ve found those two number, simply find the number in the matrix that matches up. In this case it is 542. That number is your refund. Write it in box 10 of the M1PR. Mail in the M1PR form along with the CPR from your landlord. Congratulations, you just made $542. Now go back and do this for the previous two years. Assuming the same income and rent payments your total refund is $1,626. That’s a lot of money, especially given that you only made 12K last year. As a percentage of your rent payments it’s 13.5%, which is a huge return.
You might think this all sounds very confusing but, trust me, it’s not. Every state has a similar system. If you make too much money you won’t get a refund but most people I know qualify for one. Remember, this is money you’re owed so don’t let the government keep it. Happy tax time!