Minnesota committee lays over bill to raise renter—s tax credit to match homestead refund

Representative Lee moved that House File 2,499 be laid over for possible inclusion in the 2025 omnibus tax bill, and the motion was laid over.

House File 2,499 would raise the renter—s credit to parity with Minnesota—s homestead (homeowner) property tax refund by increasing the income cutoff from $75,389 to $143,140 and by raising the maximum credit from $2,640 to $3,500. Representative Lee opened the committee discussion and said the bill is intended to address an inequity between how property tax refunds are provided to homeowners and renters.

The bill drew testimony from policy groups and tenant advocates who described the renter—s credit as a targeted tool for low-income households. Nan Madin, director of the Minnesota Budget Project, explained how the renter—s credit is calculated and said that, for the program—s purposes, 17% of a renter—s rent is treated as contributing toward property taxes. Madin told the committee that moving the renter—s credit onto the state income tax form beginning with the current filing year should simplify claims and increase participation among eligible renters.

Michael Dahl, public policy director at Homeline, testified in support and described how the credit is used by renters to meet basic needs. Dahl cited housing supply and rising rents as reasons the credit matters: he referenced a Minnesota Housing Partnership finding that median rent increased about 8% in one year and said the state is short roughly 114,000 housing units affordable to extremely low-income households.

Committee members debated policy trade-offs. Representative Johnson asked how the change would not simply be absorbed by landlords through higher rents; Representative Lee and other committee members said there is no simple mechanism to prevent that but argued the credit addresses affordability for low-income households. Representative Anderson and others raised the alternative policy view that homeownership should be further incentivized, and Representative Hewitt noted that a larger refundable credit could help renters save toward a down payment if they choose to buy a home.

Speakers and witnesses also discussed program administration and outreach. Committee members and witnesses said the 2023 tax law changes that converted the renter—s credit into a refundable income tax credit and the Department of Revenue—s voluntary electronic certificates-of-rent-paid system are expected to increase participation. Madin cited a department revenue estimate that the filing-change increased the number of households likely to claim the existing credit by nearly 120,000; Representative Lee cited a revenue note that estimated roughly 80,000 additional renters would qualify if the income cutoff is raised to homestead levels. Witnesses said VITA sites and partnerships between community organizations and the Department of Revenue are being used to reach taxpayers.

Representative Lee framed the bill as a policy choice and noted the property tax refund program dates to 1975 and an income-limit adjustment in 1983. After discussion, Representative Lee renewed her motion to lay over House File 2,499 for possible inclusion in the 2025 tax bill; the committee laid the bill over.

Ending: The committee did not vote on the merits of House File 2,499 at the hearing; the bill was laid over for possible inclusion in future omnibus tax legislation. Additional fiscal details and county-by-county estimates were referenced in materials from the Minnesota Budget Project and the bill—s revenue note.