Wisconsin Homestead Credit

Quick Facts

• Benefit type: Refundable income tax credit that reimburses part of property tax or rent for low-income homeowners and renters.
• Maximum credit: $1,168 for 2024, with amounts based on property tax or rent and household income.
• Who can claim: Wisconsin residents who lived in the state all year, have household income under $25,000, and paid property tax or rent on their primary residence.
• How to claim: File Schedule H or H-EZ with your Wisconsin Form 1, or submit Schedule H alone if you are not required to file a return.
• Why it matters: The credit mitigates the burden of Wisconsin’s relatively high property taxes, helping seniors, renters, and working families maintain housing stability.

Program Overview

The Wisconsin Homestead Credit is a longstanding “circuit breaker” program designed to relieve housing cost burdens for low-income residents. Unlike property tax exemptions, the homestead credit is refundable and based on income relative to housing costs, ensuring renters share the benefit. The credit can be claimed even if you have no Wisconsin income tax liability, making it accessible to seniors living on Social Security, disabled residents, and low-wage workers.

Wisconsin defines “household income” broadly, including taxable and nontaxable income, to target relief to those most in need. The credit formula compares property tax or rent-equivalent payments to income, delivering larger refunds to households where housing consumes a high share of income.

Eligibility Requirements

1. Residency: You must be a Wisconsin resident for the entire tax year.
2. Household income: Total household income must be $25,000 or less. This includes wages, unemployment, Social Security, pensions, nontaxable interest, maintenance (alimony), and certain cash public assistance. It excludes Supplemental Security Income (SSI) and combat pay.
3. Age/disability: There is no age requirement. Working-age adults, seniors, and disabled individuals may all qualify.
4. Housing costs: You must have paid property taxes or rent on your primary Wisconsin residence. Renters include 25% of rent as property tax-equivalent unless heat is included, in which case use 20%.
5. Ownership: Homeowners must have a legal interest in the property and be liable for property tax. Renters must have a qualifying lease and not be claimed as a dependent.
6. Public assistance recipients: Individuals who received Wisconsin Works (W-2) cash assistance or who lived in tax-exempt housing may have reduced or zero eligibility for months receiving aid.

Non-qualifying situations

• Claimants who live in nursing homes or facilities where they do not pay rent directly.
• Renters whose rent is subsidized and pay nothing out of pocket.
• Dependents claimed on someone else’s tax return.

Benefit Calculation

The credit formula considers three key numbers:

• Household income (HI).
• Property tax paid (PT) or rent-as-tax (25% or 20% of annual rent).
• Base offset (12% of HI).

The credit equals the lesser of:

1. $1,168, or
2. (Property tax or rent-as-tax) − (0.12 × Household income), with the result multiplied by 0.8.

If the calculation is negative, the credit is zero.

Example calculations

• Homeowner: Maria paid $2,400 property tax, with $18,000 household income. Base offset = $2,160. PT − offset = $240. Credit = $240 × 0.8 = $192.
• Renter with heat included: Andre pays $900 rent each month with heat included. Rent-as-tax = $10,800 × 20% = $2,160. Household income = $14,000. Offset = $1,680. Credit = ($2,160 − $1,680) × 0.8 = $384.
• Senior couple: George and Ellen pay $3,600 property tax with $22,000 income. Offset = $2,640. Difference = $960. Credit = $768, capped below $1,168.

Application Process

1. Gather records: Collect property tax bills with proof of payment (receipts, canceled checks) or rent certificates from landlords (Schedule H rent certificate). Also gather income documentation for all household members.
2. Complete Schedule H or H-EZ: Schedule H provides a detailed calculation. H-EZ is shorter for simple situations (no farmland, nursing home, or household changes). Fill in household income, property tax or rent, and months of occupancy.
3. Attach rent certificate: Renters must obtain a Wisconsin Rent Certificate (Schedule H). Landlords complete and sign the form verifying rent paid and whether heat is included.
4. File with Form 1 or separately: If you must file a Wisconsin income tax return, include Schedule H. Otherwise, mail Schedule H alone to the Department of Revenue.
5. Submit by the deadline: April 15 is the standard deadline, but you may claim up to four years retroactively by filing separate Schedule H forms.
6. Track your refund: Refunds typically arrive within 12 weeks. Use My Tax Account or call the Wisconsin DOR hotline to check status.

Documentation Checklist

• Property tax bills and receipts.
• Rent certificates signed by landlords.
• Proof of residency (utility bills, driver’s license).
• Income documents: W-2s, 1099s, SSA-1099, unemployment statements, child support records.
• Records of public assistance received (W-2, SSI letters) to calculate adjustments.

Interaction with Other Programs

• Wisconsin Earned Income Credit: Claim both if eligible; they target different households.
• Veterans and school levies: Homestead credit does not reduce eligibility for other local property tax relief programs.
• Energy assistance: Low Income Home Energy Assistance Program (LIHEAP) does not affect the credit but may reduce rent-as-tax if it covers heating.
• Supplemental Security Income: SSI is excluded from household income, benefiting seniors and disabled adults.

Strategies to Maximize Benefits

1. Request rent certificates early: Landlords are legally required to provide them within 30 days. Follow up to avoid missing deadlines.
2. Log rent payments monthly: Keep bank statements or money order receipts to verify amounts if landlords make mistakes.
3. Review household income carefully: Some nontaxable benefits must be included; consult the instructions to avoid under- or over-reporting.
4. Claim retroactively: If you missed prior years, file within four years of the original due date to secure refunds.
5. Coordinate with tax prep assistance: Free VITA/TCE sites specialize in the homestead credit. Seniors and disabled residents often receive tailored help through Aging and Disability Resource Centers.

Common Errors to Avoid

• Submitting unsigned rent certificates: Both tenant and landlord must sign. Unsigned forms result in denial.
• Using gross rent when heat is included: Remember to multiply by 20% instead of 25%.
• Forgetting to include child support received: It counts as household income.
• Missing occupancy months: If you moved mid-year, report only the months you lived at each address; otherwise, the credit may be reduced or denied.
• Ignoring DOR follow-up letters: Respond promptly with requested documents to avoid delays.

Example Scenarios

• Disabled renter: Tasha receives SSI and part-time wages, totaling $16,000. She pays $800 rent with utilities included. Rent-as-tax = $9,600 × 20% = $1,920. Offset = $1,920. Credit = ($1,920 − $1,920) × 0.8 = $0. However, if rent increases to $900, credit becomes $384. This shows the sensitivity to housing costs.
• Farmland homeowner: The Jensens own farmland and a farmhouse. They allocate property tax between homestead and farm operations. Only the homestead portion counts. With proper allocation, they receive a $600 credit.
• Urban renter: Malik pays $1,100 rent plus separate electric bills. Rent-as-tax = $13,200 × 25% = $3,300. With income $19,000, offset = $2,280. Credit = ($3,300 − $2,280) × 0.8 = $816.

Frequently Asked Questions

• Can college students claim? Students claimed as dependents cannot claim the credit. Independent students may qualify if they meet income and residency rules.
• Do I need to own property? No. Renters qualify using rent-as-tax calculations.
• Is the credit taxable? No. The refund is not taxable for federal or state purposes.
• What if my landlord refuses to sign the rent certificate? Submit alternative documentation (lease, receipts) and include a statement describing your efforts. The DOR may contact the landlord directly.
• How long do I keep records? Retain documentation for at least four years in case of audit.

Additional Resources

• Wisconsin Homestead Credit
• Schedule H Instructions
• Rent Certificate (Schedule H)
• Volunteer Tax Assistance in Wisconsin
• Aging and Disability Resource Centers