By Shannon Slattery
While homeowners may have a slew of tax credits available’property taxes, PMI, mortgage interest, and Energy Star upgrades’renters can feel left out in the deductions category come tax season.
And while there still isn’t a federal tax credit for renters, some states do pass tax savings along to their residents. Typically when states offer this credit, part of the tenant’s monthly rent goes towards paying the cost of the landlord’s property taxes on the rented property.
The good news is that as many as 17 states, Arizona, California, Michigan, Maryland, Minnesota, Montana, and Wisconsin just to name a few, offer renter tax credits ranging from $60 up to $1,450. And states like New Jersey and Vermont offer unlimited credits with no maximum cap. Woo-hoo!
Of course, most states offering tax credits for renters have certain income, residency, or age restrictions… so it’s best for tenants to investigate the requirements in advance. Another good rule of thumb is for eligible residents to keep their rental receipts. You never know when the state auditor might come a knockin’!
Find out if your state offers tax credits for renters, then pass along the good news to your tenants… they may not be aware these potential savings exist! And if you’re unsure whether or not your state participates, simply contact your state treasury department to learn more.