It is rare to get meaningful tax relief as a renter. Homeowners can get significant tax advantages , most notably in the form of the mortgage interest deduction and the capital gains exemption , both of which are available to all households regardless of circumstance. This is less common for renters. There are no federal tax breaks for renters and, while 23 states do offer some sort of rental-based tax relief, almost all are limited to age- or income-based assistance.
"Tax breaks for renters are different from homeowners," said Aaron Cirksena, CEO and Founder of MDRN Capital . "To qualify, renters need to be a resident in the state they are renting in, the property owner has to be paying tax on the place being rented and the renter cannot be dependent on another's tax return."
But, Cirksena said, it's worth looking into. "You don't necessarily need to rearrange all your finances to qualify, as you can make more impact on your finances by putting your focus into other financial strategies. If you happen to qualify, it is an added bonus."
Here are the states that offer tax breaks for renters. You can also consider consulting a financial advisor to build an efficient tax strategy and navigate local legislation.
States With No Renter's Tax Break
The following states do not offer tax benefits for renters:
- Alabama
- Alaska
- Arkansas
- Delaware
- Florida
- Georgia
- Idaho
- Illinois
- Kansas
- Kentucky
- Louisiana
- Mississippi
- Nebraska
- Nevada
- New Hampshire
- North Carolina
- Ohio
- Oklahoma
- Oregon
- South Carolina
- South Dakota
- Tennessee
- Texas
- Virginia
- Washington
- West Virginia
- Wyoming
States That Offer Tax Incentives for Renters
Consider consulting a financial advisor for help taking advantage of these tax breaks, or to explore other strategies for your goals.
Offers a tax credit based on rent or property taxes. To qualify, you must meet the following requirements:
- Lived in Arizona for the entire year
- Paid rent or property taxes on a primary residence
- Age 65 or older
- Earned no more than $3,751/$5,501 single/joint
Offers up to $60/$120 single/joint to renters who meet the following criteria:
- Paid rent in California for at least six months
- Earned no more than $50,746/$101,492 single/joint
- Was not a claimed dependent
- Did not live in a tax-exempt property
Offers a tax rebate worth up to $1,044 to renters who meet the following criteria:
- Lived in Colorado for the entire year
- Earned no more than $18,026/$23,345 single/joint
- Are 65 or older, or meet another age or disability-based qualification
- Are not a claimed dependent
Offers a tax rebate worth up to $900 to renters who meet the following criteria:
- Lived in Connecticut for the entire year
- Are 65 or older OR meet a disability or surviving spouse qualification
Offers a tax credit worth up to $1,000 to renters who meet the following criteria:
- Lived in D.C. for the entire year, did not live in public housing
- Earned less than $61,300, or $83,700 for those age 70 and older
- Are not a claimed dependent
- Did not live in tax-subsidized housing
Offers a tax credit worth $50 per claimed tax exemption to renters who meet the following criteria:
- Is a legal resident of Hawaii
- Lived in Hawaii for at least nine months
- Earned no more than $30,000
- Paid at least $1,000 in rent
- Are not a claimed dependent
Offers a tax deduction worth up to $3,000 to all Indiana renters. This does not apply to any properties exempt from Indiana property taxes.
Offers a tax reimbursement worth up to $1,000 for renters who meet the following criteria:
- Earned no more than $25,328
- Aged 65 years or older
- Did not live in property tax-exempt housing
Offers a refundable income tax credit for individuals who paid rent or property taxes based on the following criteria:
- Paid eligible expenses on a Maine property for any portion of the year
- Does not file taxes as married-filing-separately
- Are not a claimed dependent
- Earned no more than $57,500/$75,000 single/joint
Offers a tax credit worth up to $1,000 based on the following criteria:
- Age 60 or older OR meet a qualifying disability or survivorship status
- Lived in Maryland for at least six months
- Cannot have lived in tax-exempt or public housing
- Has a net worth no more than $200,000
Offers a tax deduction worth up to $4,000 for rent paid on your primary residence.
Offers a tax credit worth up to $1,700 for residents who paid rent or property taxes based on the following criteria:
- Must have paid eligible costs on their primary residence
- Must have lived in Michigan for at least six months
- Earned less than $67,300
Offers a refundable tax credit to renters worth up $2,640 for renters who meet the following criteria:
- A legal resident of Minnesota
- Lived in the state for at least 183 days
- Did not live in tax-exempt housing
- Earned no more than $73,270
- Are not a claimed dependent
Offers a tax credit worth up to $750 for renters who meet the following criteria:
- Age 65 or older OR meets a disability or survivorship qualification
- Earned no more than $27,200/$29,200 single/joint
Offers a tax credit worth up to $1,150 to renters who meet the following criteria:
- Are age 62 or older
- Lived in Montana for at least nine months
- Paid rent on a home in Montana for at least six months
- Earned no more than $45,000
Offers either a tax deduction worth up to $15,000 OR a refundable tax credit of $50. Renters must choose one and must have paid rent on a primary residence that was not tax-exempt.
Offers a tax rebate worth up to $250 for renters who meet the following criteria:
- Age 65 or older
- Earned no more than $16,000
- A resident of New Mexico
- Lived in New Mexico for at least six months
- Are not a claimed dependent
- Were not incarcerated for more than six months during the past year
Offers a refundable tax credit for renters who meet the following criteria:
- If any member of your household is over age 65, the credit is worth up to $375
- If all members of your household are under age 65, the credit is worth up to $75
- Earned no more than $18,000
- Lived in a single residence for at least six months
- Were a New York state resident for the entire year
- Paid an average monthly rent worth no more than $450
- Owned real property assets worth no more than $85,000
- Are not a claimed dependent
Offers a tax credit worth up to $400 based on the ratio of rent-to-income to renters who met the following criteria:
- Are age 65 or older OR meet certain disability or survivorship requirements
- Earn no more than $70,000
Offers a tax rebate worth up to $1,000 to renters who meet the following criteria:
- Are 65 or older OR meet certain disability or survivorship requirements
- Earn no more than $45,000
Offers a tax credit to renters who meet the following criteria:
- Must be age 65 or older OR meet certain disability or survivorship requirements
- Must have lived in Rhode Island for the entire year
- Did not live in tax-exempt housing
- Earned no more than $37,870
- Do not owe unpaid rent
Offers a tax rebate worth up to $1,259 to renters who meet the following criteria:
- Are age 66 or older OR meet certain disability or survivorship requirements
- Lived in Utah for the entire year
- Are not a claimed dependent
- Earned no more than $40,840
Offers a tax credit to renters who meet the following criteria:
- Lived in Vermont for the entire year
- Paid rent on a property for at least six months
- Are not a claimed dependent
- Meet income eligibility based on location and family size https://tax.vermont.gov/individuals/renter-credit/income-eligibility-limits
Offers a tax credit worth up to $1,168 to renters who meet the following criteria:
- Are a legal resident of Wisconsin
- Lived in Wisconsin for the entire year
- Paid rent on a property during the year
- Are 18 years or older
- Earned no more than $24,680, OR are age 62 or older, OR meet certain disability or survivorship requirements
- Are not a claimed dependent
- Did not receive certain tax credits or deductions
A financial advisor can help you weigh your options when it comes to cost of living and tax strategies. Match with a financial advisor for free.
The Bottom Line
Depending on where you live, you might receive a tax break for rent that you paid over the year. This is usually fairly minor, but it's important not to miss out on any chance to lower your taxes.
Tips For Renting On A Budget
- Getting an apartment can be very, very hard if you're just starting out. The price of rent is through the roof these days, and most years it grows a lot faster than inflation. Even worse, most landlords require good credit history to sign a lease. So what do you do if you have bad credit or even not much credit history at all?
- A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now .
- Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid — in an account that isn’t at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks .
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