If you’re a renter in D.C. who makes under $40,000 a year, you may be eligible for a trim — or even a refund — on your city income taxes.
D.C.’s Schedule H Homeowner and Renter Property Tax Credit has been around since 1977, and it’s meant to offset the cost of property taxes for homeowners and renters. We know what you’re thinking: Renters don’t pay property taxes. But landlords do, and they factor in that cost when setting the rent you pay.
“Basically [renters] are reimbursing their landlords for the taxes that have to be paid on the property and that are passed on as rent,” says Stephen Cordi, deputy director of D.C.’s Office of Tax and Revenue.
For renters, the qualifications are simple: You must have rented at your current D.C. property for the entirety of 2015 and the federal adjusted gross income (AGI) of your tax filing unit (meaning you and whoever you’re filing with, such as your spouse or your dependents) must not exceed $40,000. If you are 70 or older, that limit goes up to $60,000.
That means that if you and your roommates each pay a portion of the rent and if the AGI for each of you is below $40,000, you can get a little relief to offset the effective cost of your unit’s property taxes.
It’s not surprising if you haven’t heard of this benefit to renters. Before a reform to the credit that went into effect last year, only renters who made less than $20,000 were eligible, and they could get back $750 at most. Cordi says 17,741 residents filed for the credit for tax year 2014, after the income threshold was raised. That’s up from about 4,600 claims the previous year.
To apply, fill out the Schedule H form online at otr.cfo.dc.gov and file it with your taxes. It provides detailed instructions to calculate the amount of property tax you’re effectively paying depending on how much you pay in rent and the type of residence you live in.
The credit is designed to reimburse you for anything over 3-4 percent of your income in property taxes. At most, you could receive $1,000.
More in D.C. renting: