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Updated for the 2014 tax year.
What is the Homestead Credit?
The Homestead Credit is a tax benefit for renters and homeowners with low or moderate incomes. It is designed to lessen the impact of rent and property taxes. Qualifying persons can get back some or all of their state taxes withheld during the year. Those who do not have earnings, or whose earnings were too small to have taxes withheld, can get extra cash back from the State.
- The main criteria for eligibility include the following:
- Rented or owned a home – and lived in the home – in Wisconsin during 2014. The home may be a house, an apartment, a rented room, a mobile home, a farm, or a nursing home room. The home may not be exempt from property taxes;
- Legal resident of Wisconsin for all of 2014;
- Household income less than $24,680 for 2014. The income limit may be lower, depending on how much was paid in rent or property taxes;
- At least 18 years old on December 31, 2014;
- Cannot be claimed as a dependent on anyone else’s federal income tax return for 2014 (unless claimant is at least 62 years old).
What counts as household income?
Household income includes all income reportable for tax purposes, plus certain nontaxable income, less a deduction of $500 for dependents who lived with the claimant for at least six months of 2014. Examples of nontaxable income counted in ‘household income’ include Social Security, Unemployment Compensation, child support, IRA contributions, and nontaxable scholarships.
How much can individuals and families get back from the Homestead Credit?
The amount of the credit depends on income and on the amount of rent or property taxes. In general, the credit is higher when income is lower and/or when rent or property taxes are higher. The maximum Homestead Credit is $1,168.
Does the Homestead Credit affect eligibility for welfare? Do welfare benefits affect eligibility for the Homestead Credit?
- The Homestead Credit – and other tax credits – do not count as income in determining eligibility for benefits such as W-2, Medicaid, Food Stamps, SSI, or public or subsidized housing.
- Cash welfare benefits can reduce the Homestead Credit. The benefits that affect the Homestead Credit include Wisconsin Works (W-2), county relief, and Kinship Care.
- Countable rent or property taxes are reduced by 1/12 for each month in which cash welfare benefits were received during 2014. Schedule H includes information on how to handle this.
What is the procedure for claiming the Homestead Credit?
- Complete a Wisconsin Homestead Credit Claim (Schedule H-EZ or Schedule H) to get the Homestead Credit. (Schedule H instructions). Most claimants may use Schedule H-EZ, a simplified form.
- If filing a Wisconsin income tax return, attach Schedule H to the return. Use Form 1, 1A, or 1NPR (not WI-Z). If claimant is not required to file an income tax return, she/he may file the Homestead Credit Claim by itself.
- Claimants who own their home should attach a legible copy of their property tax bill.
- Claimants who rent their home should attach a rent certificate. The rent certificate is a tax form which the landlord needs to complete and sign. It includes information about the rented home and about the amount of rent paid.
- If the landlord refuses to sign the rent certificate, the claimant should mark the box in the claimant (renter) section to indicate this, and complete lines 1 through 13c on the rent certificate. Attach the rent certificate, along with copies of canceled checks or money order receipts, to verify rent paid for 2014.
- The Homestead Credit can be claimed on-line at no cost, through the Department of Revenue website
Can people get the Homestead Credit for prior years, if they were eligible but didn’t claim it?
- The Homestead Credit can be claimed for up to four years following the original due date of a tax return. See the WI Department of Revenue FAQ for details on deadlines.
- If not required to file an income tax return for the year in which the credit is being claimed, just file Schedule H and supporting documents (rent certificate or property tax bill);
- If claiming the Homestead Credit for a year in which a Wisconsin income tax return was filed, write “Income Tax Return Separately Filed” at the top of Schedule H. Attach a complete copy of the Wisconsin income tax return, including copies of all documents originally filed with that return. Write “Duplicate” at the top of the Wisconsin tax return.
- Send Schedule H (and duplicate tax forms) to the Wisconsin Department of Revenue, P.O. Box 34, Madison, WI 53786-0001.
Where can workers get help filing for the Homestead Credit?
*Please note that the links to tax preparation information are to external websites that may not yet be updated; read those sites carefully to be sure the information is current.*
- The Volunteer Income Tax Assistance (VITA) program provides free tax assistance in counties throughout Wisconsin.
- Taxpayer Counseling for the Elderly (TCE) provides free tax assistance for the elderly, as well as for persons eligible for the Earned Income Credit or the Homestead Credit.
- Follow this link for information on VITA and TCE site locations and hours
- Frequently Asked Questions about the Homestead Credit from Cooperative Extension, 2014
- Information about the Homestead Credit from the Wisconsin Department of Revenue (English and Spanish)
- Schedule H Schedule H-EZ (Schedule H and H-EZ instructions)
- Rent certificate
- Form 1 (Form 1 Instructions)
- Form 1A (Form 1A Instructions)
- Form 1NPR (Form 1NPR Instructions)
- Forms available as fill-in forms can be found on the Wisconsin Department of Revenue website.
This website is an educational resource only. For specific tax questions, seek professional tax assistance or contact the IRS hotline at 1-800-tax-1040.