Sunday, February 28, 2010

What is Nonrefundable Renter's Credit and how do I qualify for it?

California support personal income tax credit such as Non Refundable Renter's credit. If you paid rent for more than six months on your principal residence and meet the criteria listed below than you are liable to claim Renter's credit( $60 to $120) as per your filing status.

The Nonrefundable Renter's Credit is a personal income tax credit that can only be used to offset your tax liability; therefore, you must have a tax liability to claim the credit.

You can report this credit directly on all main form [Form 540/Form 5402EZ/Form 540NR].

You qualify for the Nonrefundable Renter's Credit if you meet all of the following:

  1. You were a resident of California in 2009.
  2. Your California adjusted gross income (AGI) is $34,412 or less if your filing status is single or married/registered domestic partner filing a separate return; or $68,824 or less if you are married/registered domestic partner filing jointly, head of household, or qualified widow(er).
  3. You paid rent for at least half of 2009 for property in California that was your principal residence.
  4. You did not live with another person for more than half the year (such as a parent) who claimed you as a dependent in 2009.
  5. You are not a minor living with and under the care of a parent, foster parent, or legal guardian.
  6. You rented property for more than half the year that was not exempt from California property tax in 2009.
  7. If you are married, neither you nor your spouse/registered domestic partner was granted a homeowner's property tax exemption during 2009. (You can still qualify for the credit, even though your spouse/registered domestic partner claimed a homeowner's exemption, as long as each of you maintained a separate residence for the entire year in 2009).

If you meet the requirements above the credit is:
  • Single, $60
  • Head of Household or widow(er), $120
  • Married/registered domestic partner filing separately, $120
  • Married/registered domestic partner filing jointly, $120

 All information is taken from California Government website. []

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