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Last Updated: 9/15/2017

Household Income for the Homestead Credit Refund (for Homeowners) and Renter's Property Tax Refund

Your “household income” affects whether or not you are eligible for the Homestead Credit Refund (for Homeowners) and Renter's Property Tax Refund; if you are eligible, it also affects the amount of your refund. 

You calculate household income on lines 1 through 8 of Form M1PR, Homestead Credit Refund (for Homeowners) and Renter Property Tax Refund

The list below outlines what you must include in household income, However, this list may not be complete, so be sure to include any other nontaxable income you receive. 

Line 1 — Federal Adjusted Gross Income (FAGI)

  • Start with the FAGI from your federal return. 
  • If you have a negative FAGI (less than zero), enter the negative amount.
  • If you didn’t file a federal return, you should still refer to federal Form 1040 and instructions to determine what your FAGI would have been.

Line 2 — Nontaxable Social Security/Railroad Retirement Board Benefits

Include Social Security and “Tier 1” Railroad Retirement Board benefits, except for any amounts that were part of your Minnesota adjusted gross income (AGI). These include:

  • Medicare deductions, including those for payment of Medicare premiums.

  • Social Security benefits listed in box 5 of Form 1099-SSA, “Net Benefits.” (Use the entire amount in box 5 if no Social Security benefits are included in AGI.)

  • Retirement Survivors Disability Insurance (RSDI). RSDI is considered Social Security Disability (SSD or SSDI) and you must include nontaxable amounts in your household income.

Note: Do not include Social Security benefits you received for a dependent.  

Line 3 — Payments to an IRA, Keogh, SEP or SIMPLE Plan

Include contributions you made to any of these retirement plans if you deducted the payments from AGI. If you have an employer deduct SEP or SIMPLE contributions from your pay, include them on line 5.

Line 4 — Total Payments Received from Programs

Include any nontaxable program payments you received, such as:

  • Minnesota Family Investment Program (MFIP)
  • Minnesota Supplemental Aid (MSA)
  • Supplemental Security Income (SSI)
  • General Assistance (GA)
  • Group Residential Housing (GRH)
  • Diversionary Work Program (DWP)
  • “Pay-for-Performance Success Payments under the federal Home Affordable Modification Program (HAMP)
  • Refugee cash assistance
  • Emergency assistance

If you receive program payments, your county usually sends a statement showing your cash benefits for the year. 

Note: Do not include the following benefits:

  • Non-cash benefits from government agencies, such as: food or food stamps, clothing, medical supplies, fuel assistance, and child care assistance or payments made to child care providers.
  • Medicaid

Repayment of Program Payments

If you repaid program payments during the year, you can subtract the amount of those repayments from the amount you report on line 4. However, you can not subtract any repayments you made in other years.  

Line 5 — Additional Nontaxable Income

Include any other sources of income that weren’t taxed on your federal return. Common examples include:

  • Disability benefits
  • Contributions to deferred compensation plans
  • Contributions to health savings accounts
  • Contributions to pre-tax employee benefit plans
  • Interest and mutual fund dividends
  • Nontaxable scholarships, fellowships and grants for education
  • Pension and annuity payments
  • Sick pay and/or disability benefits
  • Strike benefits
  • Veterans benefits
  • Workers’ compensation
The above list is only a general guide. Additional nontaxable income can be found in the Minnesota Homestead Credit Refund (for Homeowners) and Renter's Property Tax Refund instructions.
 

For Homeowners

Homeowners must include the income of certain people living with them. Examples include:

  • Spouses
  • Co-owners (including non-dependent parents)
  • Unmarried individuals
  • Non-dependent children

You must include the income of parents only if they lived with you, are not your dependents, and are co-owners of your home. 

The only individuals whose income should not be added to household income are boarders, renters, dependents, parents, or spouse’s parents.

For Renters

If household income is less than the rent shown on your Certificate of Rent Paid (CRP), you must explain the source of any other funds used to pay your rent.  

If you’re a married renter, include the income of both spouses. Do not include the income of any other persons living with you.  

If you’re an unmarried adult renter, include only your own income. 

In addition, see “Renters—Special Instructions” in the Homestead Credit Refund (for Homeowners) and Renter's Property Tax Refund instruction booklet if any of the following are true:

  • You were a part-year resident.
  • You got married, divorced or legally separated during the year.
  • You owned a mobile home but rented the land where it was located.
  • You lived in a nursing, adult foster care, intermediate care, assisted living or group home.
  • You rented out or used part of your home for a business.
  • You paid rent on more than one unit for the same month(s).

Line 7 – Dependent, elderly and retirement contribution subtraction

Your subtraction is calculated using lines 31 through 33 Form M1PR (see below). Claiming a subtraction from your household income on Form M1PR may help you qualify for a refund or increase the amount of your potential refund.

Line 31 – Subtraction for age 65 or older or disabled

If you or your spouse (if filing a joint return) were born on or before January 2, 1952, you may claim a subtraction of $4,050 when calculating your household income on Form M1PR.   

If you and your spouse (if filing a joint return) were born after January 2, 1952, you may still qualify for a subtraction of $4,050 if one of you is considered disabled.  You are considered disabled if you meet one or more of the following conditions:

  • You were certified as disabled by the Social Security Administration on or before Dec. 31, 2016.
  • During 2016, you were unable to work for at least 12 consecutive months because of a disability.
  • You are blind.

Line 32 – Dependent Subtraction

If you have one or more dependents, you may claim a subtraction to calculate household income.  The subtraction varies depending on how many dependents you have.  See page 10 of the M1PR instruction booklet to determine your subtraction. 

Line 33 – Retirement Account Contribution Subtraction

If you (or your spouse if filing a joint return) made contributions to a qualified retirement plan, you may be able to subtract some or all of those contributions from your household income.  See page 10 of the M1PR instruction booklet to determine your subtraction.