credits for renters are back
The new year brings good news for nearly all renters in California.
The California Renters Tax Credit -- suspended from the 1993 through 1997 tax years -- again will be available for the 1998 tax year to qualified renters as defined in legislation.
But don't expect the state to cut you a check if you qualify.
The Franchise Tax Board is advising that the Renters Tax Credit will reduce the amount of state income tax owed only and is not refundable.
In prior years, the renter's credit was refundable if the tax liability was less than the amount of the credit or if the taxpayer had no tax liability at all.
To qualify, the taxpayer must be a renter who has resided at his or her principal place of residence for at least one-half of the calendar year.
The renter's credit is $60 for a taxpayer filing state income tax individually who has an adjusted gross income of $25,000 or less. Married couples and head-of-household filers earning $50,000 or less are eligible for a renter's credit of $120.
Be sure to check with your tax adviser, as there are several exemptions stated in the new law that would prevent the taxpayer from claiming the renter's credit. For example, the taxpayer cannot be a dependent on another individual's tax return, the rental property cannot be exempt from property taxes, and a taxpayer does not qualify if he or she already has been granted a homeowner's property tax exemption.
But read the fine print, as there are even exceptions to the exemptions.
In another twist that may help many renters, the new legislation allows part-year residents who qualify to be allowed one-twelfth credit for each full month of California residence during the calendar year.
The renter's credit is not related to the amount of rent paid and is claimed on the taxpayer's state income tax return.
Robert Griswold and the Real Estate Today! radio show strongly support the intent and the letter of all federal and state fair housing laws. As a reminder to all owners and managers of real estate, note that all real estate advertised is subject to the Federal Fair Housing Act, which makes it illegal to advertise "any preference, limitation, discrimination because of race, color, national origin or ancestry, religion, sex, physical disability, or familial status, or intention to make any such preference, limitation or discrimination." Additional state and/or local fair housing laws may also apply. Be sure to inform all persons that all dwellings offered or advertised are on an equal opportunity basis.
Revised and Updated - Wednesday, April 26, 2006
Robert S. Griswold, CRE, CPM, CCIM,
PCAM, GRI, ARM
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