On your California income tax return, you can claim the renter’s credit to lower your state tax bill. Unlike the deductions which reduce your taxable income, credits reduce your tax liability. While some of the tax credits are refundable meaning that it can add up to your tax refund, California renter’s credit, unfortunately, isn’t refundable. So if your tax liability is $0, the credit will basically do nothing for you.
Although it is nonrefundable, the credit amount isn’t that big. For 2020, the California Renter’s Credit is $60 for single filers and $120 for joint filers. Therefore, it isn’t something significant that you’d miss even if you don’t qualify.
Claiming California Renter’s Credit
Same as any other tax credit or deduction, you must be eligible to claim this tax credit. To claim the California renter’s credit, your income must be less than $40,078 if you’re single or $80,156 if you’re filing jointly. The other eligibility requirements are as follows.
- You must be a California resident for the tax year you’re claiming the renter’s credit.
- You paid rent for a minimum of six months for your principal residence.
- The property you rented wasn’t exempt from property tax.
- You were not a minor living with your parent, legal guardian, or foster parent.
- You did not live with someone else for more than half the tax year who claimed you as a dependent.
- Your spouse or you were not granted a homeowner’s property tax exemption during the tax year you’re claiming the credit.
California renter’s credit can be claimed on Form 540 Line 46, Form 540 2EZ Line 19 or California Nonresident or Part-Year Resident Income Tax Return Line 61. Need further details on other state tax credits? Visit here to see the rest of California state income tax credits.