Property tax refunds increased, expanded

The 2013-2014 legislature increased eligibility and refund allowances for the Homestead Credit Refund and Renters’ Refund programs beginning with homestead property taxes payable 2014 and rent paid in 2013. That funding increase will have an impact for Minnesotans across the state.

Even if you haven’t qualified for a property tax refund in the past, make sure to check the new eligibility standards this year. Last year’s legislative action means more people will qualify for refunds in 2014, and previous qualifiers may be eligible for larger refunds.

  • HOMESTEAD CREDIT REFUND

    • The income limit is increased from $103,730 to $105,499.
    • The minimum percentage of income paid toward property taxes required to qualify for a refund is lowered from 3.5% to 2.5%.
    • The maximum refund amounts are increased for every income bracket: By $120 for lowest income earners (to maximum $2,580 refund) and $20 for the highest income-earners (maximum $500 refund).
    • More taxpayers will qualify because qualified contributions to retirement accounts no longer are included in the sum of total taxable income.

  • RENTERS’ PROPERTY TAX REFUND

    • The income limit is increased from $56,220 to $57,169.
    • The minimum percentage of income paid toward property taxes required to qualify for a refund is lowered from 3.5% to 2%.
    • The maximum refund amounts are increased for every income bracket: By $810 for lowest incomeearners (to maximum $2,000 refund) and $80 for the highest income-earners (maximum $200 refund).
    • More taxpayers will qualify because qualified contributions to retirement accounts no longer are included in the sum of total taxable income.

Other ways the legislature helped reduce property taxes

PROPERTY TAX RELIEF THROUGH LGA
Local Government Aid (LGA) is state aid paid to cities to help provide for public services, thereby reducing local property tax reliance. The legislature increased statewide LGA by $80 million in the 2013 tax bill, and $15.6 million in the 2014 bill.

PROPERTY TAX RELIEF THROUGH COUNTY AID
County Program Aid is like LGA, in that it is state assistance intended to take pressure off local commitments and property tax payers. The 2013 tax bill increased statewide County Aid payments by $40 million.

AQUATIC INVASIVE SPECIES AID
This year, the legislature approved a new form of aid to counties that are battling Aquatic Invasive Species. The new funding will take significant relief off property tax payers, who currently help fund these programs, and will improve water quality across the state.

SPECIAL PROPERTY TAX REFUND
You may be eligible if you are a homeowner, owned your home on both Jan. 2, 2013 and Jan. 2, 2014 and the net property tax on your homestead increased by more than 12% and at least $100 from 2013 to 2014. The increase cannot be due to improvements to your home. This refund does not depend on your income.

DISABLED VETS MAY QUALIFY FOR AN EXEMPTION
United States military veterans with service-connected disabilities of 70% or more may be eligible for a market value exclusion of up to $150,000 on homestead property. Veterans with total, 100% and permanent service-connected disabilities may be eligible for a market value exclusion of up to $300,000 on homestead property. Forms and information also may be obtained at http://www.revenue.state.mn.us/individuals/individ_income/Pages/Members_of_the_Military.aspx

SENIOR CITIZEN PROPERTY TAX DEFERRAL PROGRAM
Applications are available in the county auditor’s office or may be obtained from the Minnesota Department of Revenue website at: http://www.revenue.state.mn.us/individuals/prop_tax_refund/Pages/File-and-Pay.aspx

AGRICULTURAL HOMESTEAD MARKET VALUE CREDIT
The 2014 Tax Bill 2 included a onetime, maximum $205 supplemental payment to farmers qualifying for the Agricultural Homestead Market Value Credit, and a permanent formula change that will result in ongoing credit increases.

How to apply for property tax relief

To apply for the refund, complete form M1PR. This form is available at public libraries and at other locations where state tax forms are distributed. It can also be found at the Minnesota Department of Revenue website at: http://www.revenue.state.mn.us/individuals/prop_tax_refund/Pages/File-and-Pay.aspx

The due date to file for a refund of 2014 property taxes is August 15. The deadline to file for a refund of rent paid in 2013 is August 15.

Questions?

Please contact the Department of Revenue at (651) 296-3781 or by e-mail at indinctax@state.mn.us. You can also check the status of your refund by calling (651) 296-4444 or visit https://www.mndor.state.mn.us/tp/refund/_/

Senate DFL