How a Renter’s Tax Credit Works
A renter’s credit is a tax credit, so it lowers your state tax bill dollar for dollar. A deduction is different because it lowers the income you’re taxed on. See What’s the difference between tax credits and deductions?
Refundable vs. Nonrefundable Credits
The type of credit decides whether it can put money back in your pocket.
- A nonrefundable credit can lower your state tax to $0, but it can’t create a refund.
- A refundable credit can lower what you owe or increase your refund.
Income Limits
States limit renter’s credits by income. Some use adjusted gross income (AGI), which is your total income minus certain adjustments allowed by tax law. Others use household income, a broader measure defined in each state’s instructions.
How to Claim a Renter’s Credit on Your State Return
You claim a renter’s credit when you file your state income tax return.
- Confirm your state offers a renter’s credit and you meet its requirements.
- Keep records of where you lived and the rent you paid during the year.
- Collect any form your state requires from your landlord. In Minnesota, that’s the Certificate of Rent Paid (CRP).
- File your state return with the credit included. In Minnesota, that’s Form M1 with Schedule M1RENT and Schedule M1REF.
- Include copies of your CRP if you file a Minnesota return by mail (Minnesota Department of Revenue).
California vs. Minnesota Renter’s Credit Example
California’s figures below are for the 2025 tax year. RDP means registered domestic partner.
| California | Minnesota | |
|---|---|---|
| Credit type | Nonrefundable | Refundable |
| Residency | California resident | Full- or part-year Minnesota resident |
| Rent requirement | Paid rent for at least half the year on your principal residence in California | Lived in and paid rent on a Minnesota building that was assessed property tax or paid in lieu of property tax |
| Income limit | CA AGI of $53,994 or less (single or married/RDP filing separately); $107,987 or less (married/RDP filing jointly, head of household, or qualified widow(er)) | Household income below $77,570 |
| Credit amount | $60 or $120, depending on filing status | Up to $2,720, depending on your filing situation |
| Dependent rule | Can’t be claimed as a dependent by the person you lived with for more than half the year | Can’t be claimed as a dependent |
Sources: California Franchise Tax Board and Minnesota Department of Revenue.
In California, the credit amount is unrelated to how much rent you paid. You also can’t claim it if you or your spouse got the homeowner’s property tax exemption.
In Minnesota, the Renter’s Credit replaced the separate renter’s property tax refund (Form M1PR) starting with 2024 tax returns. Minnesota also requires a valid Social Security number or individual taxpayer identification number (ITIN).
Check Your State’s Revenue Agency Website
Other states set their own rules. Your state’s Department of Revenue or tax agency website shows whether a renter’s credit exists and who qualifies. It also lists the income limits and credit amounts for each tax year.
Sources
- California Franchise Tax Board, SB 843 Legislative Analysis
- California Franchise Tax Board, Nonrefundable Renter’s Credit
- Minnesota Department of Revenue, Renter’s Credit
- Minnesota Department of Revenue, Renter’s Property Tax Refund
