Information on Renter’s and Homestead Tax Credit in Wisconsin
Published on January 18th, 2017
By Jennifer Oppriecht
For renters in Wisconsin, it may feel like old St. Nick is making the rounds again, as you have a chance to get a tax credit thanks to the State of Wisconsin’s School Property Tax Credit and the Homestead Tax Credit. This post includes a 2016 update!
If you’re new to renting or this is the first time hearing about the Renter’s or Homestead Tax Credits and the School Property Tax Credit, this includes information on:
- Who qualifies for both tax credits
- The amount of money you can receive from each of the credits
- Instructions and forms for applying for the Renter’s and Homestead Tax Credit
2016 UPDATE: No changes!
Once again, Dave Launder of Baker & Launder has informed us that there are no changes to the available Renter’s and Homestead Tax Credits or the Wisconsin School Property Tax Credit.
“The Homestead tax credit appears to be in a holding pattern. The maximum income limit to qualify for the credit remains at $24,680 for 2016, while the max credit stays at $1,168. This makes the fifth consecutive year of status quo,” Launder said.
Before you read on, you’ll want to check out this brief overview video from the Wisconsin Department of Revenue.
Renters can receive both credits, provided they fit within the income criteria.
According to Accountant Dave Launder of Baker and Launder, “Everyone is entitled to the Renter’s and Homeowner’s School Property Tax Credit, regardless of income. The Homestead Tax Credit is available to anyone who earned less than $24,680 in 2016.”
Launder reports no significant changes in the tax credits for the 2016 tax year. “The income amounts did not change at all, and the maximum credit is exactly the same,” he said. “Looking at the calculation, they essentially didn’t change anything from 2013.”
Here’s a breakdown of the differences between the two credits:
Renter’s and Homeowner’s School Property Tax Credit (Renter’s Credit)
Most people lose track of this tax credit, and focus only on the Homestead. They shouldn’t. You can claim the renter’s credit if you paid rent during 2016 for living quarters that you used as your primary residence. The Renter’s Credit is a maximum of $300, and it’s based on the amount of rent paid.
Homestead Tax Credit
The Homestead Tax Credit was created to provide tax relief to renters below a certain income threshold. Basically, the lower your income, and the more rent you pay, the bigger your credit will be.
The maximum credit for Homestead is $1,168, and it also includes a 4-year statute of limitations. That means if you’ve been renting for the last four years and never claimed the credit, you should get the prior year’s rent certificates completed, and then file a Homestead Credit Form (Schedule H) by itself for that particular year. It doesn’t have to go with their return.
Curious if you qualify? Get ready – here are the requirements, straight from the State of Wisconsin’s website:
- You must have been a legal resident of Wisconsin for all of 2016, from January 1 through December 31.
- You must have been 18 years of age or older on December 31, 2016.
- You cannot be claimed as a dependent on someone else’s 2016 federal income tax return. (Note: This limitation does not apply if you were 62 years of age or over on December 31, 2016.)
- Your household income must have been less than $24,680 for 2016. See the definition of “household income.”
- You must have been the owner or renter of your Wisconsin homestead during 2016. See the definition of “homestead.”
- You must not have lived for the entire year of 2016 in housing that is exempt from property taxes. (Note: Property owned by a municipal housing authority is not considered tax-exempt for homestead credit purposes if that authority makes payments in place of property taxes to the city or town in which it is located. If you live in public housing, you should check with your rental manager.)
- You must not, at the time of filing a claim, be living in a nursing home and receiving Title XIX medical assistance.
- You must not be claiming Wisconsin farmland preservation credit for 2016.
- You must not be claiming the veterans and surviving spouses property tax credit on the 2016 real estate taxes.
- Only one claim may be filed per household (married couple residing together). See the definition of “household.”
- No claim may be filed on behalf of a person after his or her death.
- You must not have received Wisconsin Works (W2) payments of any amount or county relief payments of $400 or more for each month of 2016. (Note: If you received any amount of a Wisconsin Works (W2) payment in 2016 or county relief payments of $400 or more for any month in 2016, your property taxes and rent have to be reduced by one-twelfth for each month you received any of these benefits.)
Note: You need not be a homeowner to qualify. Renters as well as persons who reside in mobile or manufactured homes or nursing homes that are subject to property taxes may also qualify to file a claim.
How do I claim the credits?
First, you’ll need to fill out this Renter’s Certificate. You’ll need to fill in all fields in the renter (claimant) section except your social security number and then submit it to your landlord.
You’ll also need to inform your landlord if you’re married and living with your spouse. After your landlord returns the completed rent certificate, enter your social security number.
Next, to claim the Renter’s Credit on Form 1, refer to page 32-33 of this Form 1 instruction PDF to determine your rent credit.
For the Homestead Credit, you’ll need to include the rent certificate with Schedule H or H-EZ. For more specific information on which form you should use, refer to the State of Wisconsin’s webpage.
What is included in the total rent amount on the rent certificate?
The total rent amount paid includes all rent, water and parking payments made to your landlord by all occupants. If heat is included in your rent, you’ll receive a lower credit. If you pay your own heat, expect a higher credit. Your landlord should have this information.
One last note: We’ve heard unfortunate tales of renters who claim their landlords didn’t know anything about these credits. Believe us, if you own property in Wisconsin, you should be aware of the credits. Every landlord should be willing to fill in the renter’s certificate.
Are you a Steve Brown Apartments resident?
For the Steve Brown Apartments residents who may be reading this, we’ve tried to make this process as easy as possible. For those of you who qualify for the State of Wisconsin Homestead Credit, we will need to complete a Rent Certificate for you.
To find out if you qualify for the Homestead Credit visit the Wisconsin Department of Revenue web site. The Homestead Credit program was designed to soften the impact of property taxes and rent on persons with lower incomes. We have Rent Certificate forms available at our office or you can download one on this web page.
You will need to fill in all fields in the renter (claimant) section except your social security number before submitting it to us to complete. Please inform us if you are living with your spouse. The total rent amount paid includes all rent, water and parking payments made to us by all occupants.
Please allow at least 24 hours for processing the Rent Certificate. If you would like your Rent Certificate mailed to you please include a self-addressed, stamped envelope. You may also pick the form up at the Steve Brown Apartments office at 120 West Gorham, Monday through Friday between 9:00 a.m. and 6:00 p.m.
This website is an educational resource only. For specific tax questions, seek professional tax assistance or contact the Wisconsin Department of Revenue at (608)266-2486.