Can I submit a homestead credit if I lived in 2 rentals in 2020? [Wisconsin]

[Nick1885]

Hi everyone,

I'm a student, which means I often don't stay in the same rental unit for multiple school years. At least in my area, barely anyone does. I lived in one rental unit from June 1st, 2019 - May 22nd 2020. I lived in another from June 1st, and currently reside here.

For the homestead credit, I noticed it only lets me put in the information from one of my units, is this how it works? I'm in Wisconsin if that helps any.

I lived in both units in 2020, and paid rent for both. I don't know the laws surrounding this, so any help would be much appreciated! Thank you!

[Carl]

Are you an undergraduate college student? I ask, because more than likely your homestead is your parent's house, where ever that may be.

If, in 2020 you were:

- Under the age of 23 on Dec 31 of the tax year, and;

- Enrolled as a full time student for "any" "one" semester that started in the tax year, and

- Enrolled at an accredited institution, and;

- Enrolled in a course of student that will lead to a degree *or* credentialed certification, and

-you did not provide more than half of your own support for the entire tax year (see below for support), then:

Your parents qualify to claim you as a dependent on their tax return. Therefore your "home" is your parent's house.

Support:

There are only two possible ways an undergraduate student can provide more than half of their own support. Understand that scholarships, grants, 529 distributions, gifts from Aunt Mary, money from mom and dad, and any other third party support received by the student from any source *does* *not* *count* for the student providing their own support. The student can only claim to have provided their own support if:

1) The student was self-employed or had a W-2 job and earned enough money to justify their claim to providing their own support. The earned income received in the tax year also has to be more than the total of all scholarships, grants, 529 distributions and all other 3rd party support received by the student during the same tax year.

2) The student is the *primary* borrower on a *qualified* student loan, and sufficient funds were distributed to the student during the tax year from that loan, to justify a claim to providing more than half of their own support. Additionally, the monies distributed to the student during the tax year must be more than the total of all scholarships, grants, 529 distributions and all other 3rd party income recieved by the student during the same tax year.

[Nick1885]

I was not under the age of 23 on Dec. 31st of the ending of 2020 tax year. I did receive grants, and student loans, because I am an undergrad. I also had a job, however I don't know if this would be enough money to "support" myself without the help of the loans and grants. 

Thank you for the information, @Carl!

[DaveF1006]

It depends. Please read the qualifications for the homestead credit in this link. The three main provisions that may pertain to you are:

• You own or rent your Wisconsin homestead that is subject to Wisconsin property taxes during 2020. (Persons who reside in mobile or manufactured homes or nursing homes that are subject to property taxes may also qualify to file a claim. See the definition of "homestead".)
• You are not claimed as a dependent on someone else's 2020 federal income tax return.
  Note: This limitation does not apply if you were 62 years of age or over on December 31, 2020.
• You did not live for the entire 2020 year in housing that is exempt from property taxes.
• Your landlord will need to issue you a rent certificate to qualify for the exemption

If both places qualify for the homestead credit, after you enter the information from your first rental and answer all the questions in the return, there is an opportunity to issue a second rent certificate. Be sure you get a rent certificate from each landlord in order to receive the credit.  To enter in Turbo Tax:

1. Log into Turbo Tax
2. Select state taxes on the left pane in your return
3. After entering preliminary information you will reach a screen that says Let's take a Look at your Wisconsin Credits and Taxes
4. Look for Homestead Credit and follow the directions I outlined above.

[Nick1885]

Hi Dave, 

I check everything off on the three main provisions (eligible). When I was doing it earlier, it didn't seem that there was an option for a second one. I'll recheck tomorrow! Thank you!

[Carl]

Not meeting any one of the requirements, means you don't qualify to be claimed as a dependent on any one else's tax return. So that's not an issue now. Just had to check and be sure, because I see quite a lot of undergraduates who do qualify as a dependent on their parent's tax return, claiming they don't qualify as a dependent, just so they can get the stimulus. What they don't realize is that the IRS is going to audit them on this 24-36 months down the road, and they're going to lose on that front.

Now on a prelimiary (and not complete) read through of the requirements, it "looks" like you may be able to claim the homestead credit. But you really need to confirm this yourself by reading the qualification requirements on the Wisconsin Dept. of Revenue website at https://www.revenue.wi.gov/Pages/FAQS/ise-home.aspx

[Nick1885]

Hi Carl,

As much as I wanted the stimulus to begin with, I've been trying to research as much as I can to avoid being audited. And if I was a dependent, I definitely would file as such. 

Thank you!