All You Ever Wanted to Know about Rent Certificates

I know, I know… I have fallen behind on my blogging duties.  This is a very “nuts” time of the year.  January through March is TAX TIME.  This week, I did get the financial statements done for some of our corporate entities that don’t see very much activity.  I also got all of my year end payroll reports done this week… 940 and 941, FUTA and SUTA, W-2’s and W-3’s.  DONE!  My biggest project I am working on right now is 1099’s.  1099’s are a form that we need to send out to people whom we paid more than $600 to, if they are not a corporation.

I also have 1099-INT’s that need to get out as well as 1098’s.  But, I will take some time away from that to do the radio show this evening.  Your welcome.

We have a couple of questions that came up in the last few weeks.  The first has to do with collecting past due rental accounts.  How legal is it for a landlord to personally go to the new address of one of their old tenants to demand payment in person?  The next question has to do with roommates.  The tenant wants out of the lease because of conflict with their roommates, but their roommates refuse to let the tenant out of the lease.  Can they do that?  What additional steps are there to evict (or get a judgment) against someone who is on active duty in the military?  Finally, what suggestions do I have to help encourage a tenant to pay the rent to avoid an eviction action?

The main topic, if there is time after all of those great questions, will be a summary of a meeting I attended earlier this week, it was a meeting of the Market Street Diner’s Club.  What is that you ask?  Good question!  Well, there are a number of large apartment associations throughout the state, including the Central Wisconsin Apartment Association out of Stevens Point, the Apartment Association of Southeast Wisconsin out of the Milwaukee Area, the Apartment Association of South Central Wisconsin out of the Madison Area, and the Wisconsin Apartment Association that has local affiliates scattered throughout the state.  The truth is, that these various groups have some bad blood between them based on long ancient history.  A few years ago, it was decided that the leaders of these various organizations should get together in an informal setting to try to re-open the lines of communication between them.  The venue was the Market Street Diner in Sun Prairie.  As there we no injuries after that meeting, we have been having annual meetings ever since.  The topic of this most recent meeting, was with the change to Republican leadership in Madison, what issues were our organizations going to work on individually, and of those issues, which ones did we think the entire group could work together on.

On last week’s Dr. Rent program, we talked about the Homestead Tax Credit and Rent Certificates.

The first thing we talked about is who needs a Rent Certificate.  Many tenants think they need this form filled out so they can fill in that part of their Wisconsin tax form that asks how much rent they paid.  They don’t.  If you are audited, it would be good to be able to prove the amount of rent you put down is the amount of rent you paid.  However, that can be verified with receipts or cancelled checks.  That is not to say that a Rent Certificate cannot be used to just verify that number, it isn’t needed.

The Rent Certificate form is for tenants who are going claim Homestead Credit on their Wisconsin taxes.  You can claim the Homestead Credit by filing Schedule H (or H-EZ) with your state tax return (this is a Wisconsin thing, NOT a federal thing).  These tax forms are available at the library, or online at the Wisconsin Department of Revenue’s website (http://www.revenue.wi.gov).  Not everyone qualifies for the Homestead Credit.  Although it is available to home owners AND renters, there are certain qualifications to be eligible.  Per the Schedule H instructions, to qualify you must…

Be 18 or older (basically, be born on January 1, 1993 or earlier).

Be a legal resident of Wisconsin for the entire year 2010.

Must have a 2010 household income of less than $24,680.

Must be either the owner or the renter of the homestead you lived in during 2010.

Cannot be claimed as a dependent on someone else’s tax return.

Cannot be receiving Title XIX assistance if you are living in a nursing home.

Cannot have received W2 payments or county relief payments of $400 or more for each month of 2010.

Have to have lived in housing that is subject to property taxes, or if in housing owned by a municipal housing authority, a housing authority that makes payments in lieu of taxes.

Cannot have claimed a Wisconsin farmland preservation credit, or veterans and surviving spouses property tax credit for 2010.

Cannot have a different member of the household file a 2010 Schedule H.

Also, the Homestead tax credit is not available if the Schedule H is being filed on behalf of someone who is deceased.

Of course, you should see a tax preparer or expert in taxes review your individual situation with you to determine if you qualify.

A couple of quick notes on the Rent Certificate form itself.  There can be no corrections on it, is has to be filled out correctly the first time.  Any rent certificate form that has crossed out items or corrections or even white out will be rejected.  The reason for this is that there was a problem with tenants getting the landlords to fill out the form, and then tenants would change the numbers to get a bigger credit.

On the form, the total amount of rent gets divided among the number of tenants (unless they are married).  So, if an unmarried couple live in an apartment with both people’s name on the lease and they paid $10,000 in rent in 2010, when we fill out the form as a landlord, we can only credit each tenant for half, or $5,000.  Often we are asked to modify it so one tenant can get credit for the entire amount.  A landlord cannot legally do that.  However, if you look at the bottom of the Rent Certificate form, there is a worksheet that the tenants can fill out if they feel that splitting the rent halv-sies is not fair.

What if the landlord refuses to fill out the Rent Certificate?  I hate to say it, but that is their right.  The landlord has no legal obligation to fill out the form.  However, that is a bad public relations / customer service move.  It only takes a few minutes to do.  Most landlords I know of will fill out the form, but won’t supply it, you have to bring in the form.  If the landlord refuses to fill out the form, there is box you can check to indicate this.  The tenant can then fill out the form, but with the form, they will have to submit proof of rental payment (such as receipts if paid in cash, or copies of the cancelled checks).

Another important note, this credit is for rent paid, NOT rent due.  The landlord fills out the form based on rent received.  If you didn’t pay rent for December, you won’t get credit for rent for December.  However, a Department of Revenue ruling did say that the rent didn’t need to be RECEIVED in 2010.  As long as the rent was received by the time the rent certificate is being filled out, even if December rent was paid in January or February of the following year, it can be reported as paid on the Rent Certificate.

As you can see, if you miss one installment of the Dr. Rent show, you miss a lot.  The Dr. Rent show can be heard on Thursdays, from 5 to 6 PM on WNRB-LP.  In the greater Wausau area, that is at 93.3 FM on your radio dial.  For the entire world, the live stream is up and you can tune into the Dr. Rent show using your computer by going to http://71.98.63.236:88/listen.pls(NOTE:  To listen to the live stream, you must have software such as WinAmp, Real Player or I-Tunes installed on your computer, all three of these programs can be downloaded for free from the internet, just do some googling to find them.)

Until later this evening…. HAPPY RENTING!

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About drrent

Wausau, Wisconsin Landlord, past president of the Wisconsin Apartment Association, Host of the Dr Rent Radio Show on WNRB-LP, 93.3 FM, Wausau, WI
This entry was posted in Homestead Credit, Questions, Rent Certificate, WNRB and tagged , , , . Bookmark the permalink.

8 Responses to All You Ever Wanted to Know about Rent Certificates

  1. DK says:

    Hello,

    During the 2011 year I lived at the same place as a resident of WI. I had one roommate from Jan. 1st until May 31st. Then I had a different roommate from Sept. 1st to Dec. 31st. The summer months of Jun. to Aug. I lived alone with no roommate. When I had a roommate the rent was split 50/50 and during the summer months I payed all of the rent.

    On the rent certificate form what value do I enter in to line 11d (“Number of occupants…”). Is it 2 or 3? Also, what value should I enter into 11e? Do I put the total rent amount I paid or put the value of 11e = 11c / 11d and then fill out the shared expenses?

    My landlord was also unsure of what to put. They said usually they do 11e = 11c / 11d but they didn’t know how to handle the change of roommate situation.

    Thank you.

    • drrent says:

      Very good question…

      I will always recommend on tax questions that you also ask a tax preparer familiar with the homestead credit and these forms. However, to better help you, I wouuld ask a follow up question.

      Who was the actual tenant on the leading during this time. This may be very easy if you were the only one on the lease with the landlord and that did not change when you did and did not have roommates. If you were the only one on the lease, then the landlord can give you credit for all rent due. You would then have a sub-let relationship. If each time there was a change in people living there, the names on the lease also changed, it gets more complicated.

      If that were the case, here is what I would do if it were me (again, I will defer to a tax expert if they give you better advice)… if it were me, I would list it as 1 occupant, but for the amount of rent, I would break it down by what was paid. So, lets say your rent was $1000… I would list 5 months at $500 (Jan to May), then I would list 3 months at $1000 (June-August), and the last 4 months at $500 again.

      I hope this response is helpful.

  2. tiffany says:

    What if I lived in two places this year? One in lived in for 9 months of the year and 3 months in the other can I clam Homestead and do I need two rent certificates

  3. Jennifer says:

    Thank you for the blog- we moved to WI in June, I understand that you have to be a resident for the entire year. Our landlord did fill out the certificate, should I send it in anyway or just keep it? And why do you have to be a resident for the entire year?

  4. How much income do I have to make to quality for homestead refund, for 2012 ? I made $27,500 and am singlw

  5. Sally says:

    I have recieved my renters certificate but all my landlord did was divide my roommates and my rent in half. I paid more than her and have my check stubs to prove I did. What can I do? Is there a number I can call?

  6. Kay says:

    I have a question I’m hoping you can answer. If you don’t need to fill out a homestead form to get the credit, and its the landlords right not to sign it anyway, why is there a form at all. Thanks for your help!

  7. Tiffany says:

    I was wondering if I can submit Rental receipts for paying in cash in the state of Wisconsin? landlord will not sign and I did not pay with check so I cannot send in copy’s of personal/cashier checks however I have written receipts from the landlord. the instructions in the homestead packet says nothing about rent receipts. Should I also send in a copy of my lease?? Unsure of what to do and I do not want to miss out of this extra money.
    Thank you!

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