California help?

[Possi]

What is this renter's tax credit all about? My client rented in base housing. Does she qualify? The form is asking for the landlord information and I think she might not qualify for this at all. I feel like I'm going down a rabbit hole on this one!

[mactoolsix]

$60 for Single AGI < $38K
$120 for MFJ AGI < $76K

Must have been a CA resident the entire year
Paid CA rent at least 1/2 year

Here's all the rules:

https://www.ftb.ca.gov/individuals/faq/ivr/203.shtml

Mike

[Possi]

Thanks mike

$60 for Single AGI < $38K
$120 for MFJ AGI < $76K

Must have been a CA resident the entire year
Paid CA rent at least 1/2 year

Here's all the rules:

https://www.ftb.ca.gov/individuals/faq/ivr/203.shtml

Mike

Thanks, Mike. It looked like she qualified, but since it was base housing, I wasn't sure.

Is there any reasoning or theory behind this tax credit? I don't understand why anybody should get money for renting. I just don't get it!

[Rapid Robert]

Thanks, Mike. It looked like she qualified, but since it was base housing, I wasn't sure.

Is there any reasoning or theory behind this tax credit? I don't understand why anybody should get money for renting. I just don't get it!

No, she probably does not qualify. Did you read the link provided above?

"The property you rented was not exempt from California property tax."

I imagine military property would be exempt, but it's worth checking if you think somehow it might not be.

The renter's credit is to provide parity for renters when compared to homeowners, who get a $7,000 exemption on assessed value for purposes of property tax. The theory is that renters too are paying property tax indirectly via their landlords, so should also get the same benefit as an actual homeowner. The income phaseout means, given CA higher cost of living, relatively few taxpayers actually get the renter's credit, and it's non-refundable.

Also, I quibble with the comment above about needing to be a full year resident. Last time I checked, you got a pro-rated credit for months 7-11 of part-year residency.

[Possi]

full year resident

No, she probably does not qualify. Did you read the link provided above?

"The property you rented was not exempt from California property tax."

I imagine military property would be exempt, but it's worth checking if you think somehow it might not be.

The renter's credit is to provide parity for renters when compared to homeowners, who get a $7,000 exemption on assessed value for purposes of property tax. The theory is that renters too are paying property tax indirectly via their landlords, so should also get the same benefit as an actual homeowner. The income phaseout means, given CA higher cost of living, relatively few taxpayers actually get the renter's credit, and it's non-refundable.

Also, I quibble with the comment above about needing to be a full year resident. Last time I checked, you got a pro-rated credit for months 7-11 of part-year residency.

I did read the rules. I wouldn't "quibble with the comment about needing to be a full year resident." It's not a "comment" about needing to be a full year resident. It's number 1 in the rules. She was a full year resident.

How would I be able to confirm that military housing is or is not exempt from property tax?

Thanks for all your help, really. This is a strange bird to me, and I've been doing taxes for many years.

[Rapid Robert]

I did read the rules. I wouldn't "quibble with the comment about needing to be a full year resident." It's not a "comment" about needing to be a full year resident. It's number 1 in the rules.

That is an ERROR in the link provided at the FTB web site. One does NOT need to be a full year resident to get the renter's credit.

See CA R&TC 17053.5. Note that (c)(1) does not use the qualifier "full year".

"(c) For purposes of this section, a "qualified renter" means an
individual who satisfies both of the following:
(1) Was a resident of this state, as defined in Section 17014.
[...]
(e) An otherwise qualified renter who is a nonresident for any
portion of the taxable year shall claim the credits set forth in
subdivision (a) at the rate of one-twelfth of those credits for each
full month that individual resided within this state during the
taxable year."

As I said, one needs a minimum of six months, so a part-year resident can pro-rate months 7 through 11.

Also please note that military personnel cannot claim the renter's credit unless they are legal residents of CA (given the special domicile rules for military, etc).

[Possi]

CA resident

That is an ERROR in the link provided at the FTB web site. One does NOT need to be a full year resident to get the renter's credit.

See CA R&TC 17053.5. Note that (c)(1) does not use the qualifier "full year".

Also please note that military personnel cannot claim the renter's credit unless they are legal residents of CA (given the special domicile rules for military, etc).

If she wasn't a CA resident stationed in CA, I wouldn't be doing a CA tax return.

So, does anyone out there know if Military housing is exempt from this property tax, excluding her from getting the tax credit? I'd sure love to put this puppy to bed.

Thanks!

[Rapid Robert]

If she wasn't a CA resident stationed in CA, I wouldn't be doing a CA tax return.

So, does anyone out there know if Military housing is exempt from this property tax, excluding her from getting the tax credit? I'd sure love to put this puppy to bed.

This is the first time we've even been told taxpayer is a military servicemember. Even if not a CA domiciliary, you could be filing a return because of non-military source income from CA.

Anyway, the first thing I'd try is to plug in the property address at the county assessor's web site for whatever county it is in. Most counties in CA provide online public records of all real property tax bills. If you don't find it, it doesn't necessarily prove that tax wasn't paid, as it might be under a different address. But if it's really worth it, I suspect a little more digging around, internet searches, asking the landlord, etc, will turn up the answer.