SAINT PAUL, Minn. – Today, Rep. Julie Sandstede (DFL – Hibbing) presented a pair of bills to the House Property Taxes Division aimed at increasing the amount Minnesota seniors receive on their property tax refunds. The legislation will also simplify the filing process, eliminating a complex formula frequently resulting in miscalculated refund amounts.
“This legislation would help more people – especially Minnesota seniors – afford the rising costs they’re struggling with every day, while helping them stay in their homes or pay rent,” Rep. Sandstede said. “While there are many good ideas out there this session to help older Minnesotans – including reducing or even eliminating the tax on social security income – these bills are designed to target property tax assistance to those with low or fixed incomes who would experience the greatest benefit from these changes and have a better shot at an economically secure retirement in Minnesota.”
Minnesota’s property tax refund takes two forms: the Homestead Credit Refund and the Renters’ Credit. Refund amounts are based on the amount a person pays in property taxes with refund amounts increasing as an individual’s income decreases. More than a half-million homeowners receive the refund each year, averaging about $500 each, as do over 300,000 renters receiving an average of approximately $215.
Rep. Sandstede’s first bill simplifies Minnesota’s property tax refund system to calculate refund amounts based on federal adjusted gross income. Currently, property tax refunds are calculated based on a “household income” definition including adjusted gross income, as well as other non-taxable income sources including social security, contributions to retirement plans, and government assistance payments. Under the bill, over 70% of homeowners and renters currently receiving a refund would receive an increase of about $270, and about 93,000 more Minnesotans would become eligible for a property tax refund.
The other piece of legislation would exclude non-taxable social security income when determining the amount of a property tax refund. Following this change, approximately 252,000 homeowners would see an increase in their Homestead Credit Refund, averaging $350, and 94,000 renters would see an increase in their Renters’ Credit at an average of $290.
The committee laid the bills over for future consideration in a broader package of property tax legislation.
More information, including documents from the hearing, is available on the committee webpage. Video of the hearing will be available on House Public Information Services’ YouTube Channel.