Minnesota's property tax refund goes to homeowners and renters whose property taxes or rent exceeded a percentage of their household income in the previous year

Minnesota calls this the Property Tax Refund, and it is based on what you paid in property taxes or rent during the tax year, compared to your household income. The state refunds money to people whose tax burden was too high relative to what they earned. You do not have to be a first-time homeowner or meet any special circumstance — the program looks only at the numbers from your tax return and your property tax bill.

The refund is calculated and claimed through your Minnesota state income tax return. You file your federal return, then your state return, and the refund appears as a credit or a payment depending on your tax situation. The amount varies widely by income, property taxes paid, and family size.

Key Takeaways

  • You claim the property tax refund on your Minnesota state income tax return, not through a separate process.
  • Homeowners use their actual property tax bill; renters use 20 percent of their annual rent as a substitute for property taxes.
  • Your household income must fall below the threshold set by the state, which changes each year and depends on filing status.
  • The refund is calculated automatically by tax software or by the Minnesota Department of Revenue if you file by paper.
  • You must have lived in Minnesota for the entire tax year and owned or rented your primary residence to be considered.

Income limits that determine whether you receive a refund

Minnesota sets an income ceiling each year. If your household income exceeds that limit, you receive no refund. The threshold depends on your filing status — single, married filing jointly, married filing separately, or head of household — and it changes annually.

For the 2023 tax year (filed in 2024), the income limits were approximately $89,000 for married couples filing jointly and lower for single filers, but these numbers shift year to year based on inflation adjustments. You can find the exact current limit on the Minnesota Department of Revenue website or in the instructions for Form M1PR, which is the property tax refund form.

If you are below the income limit, the refund amount depends on how much you paid in property taxes or rent relative to your income. The state uses a formula that calculates what percentage of your income went to housing costs, then refunds the portion above a certain threshold.

How homeowners and renters are treated differently

Homeowners report their actual property tax bill — the amount shown on their property tax statement for the year. Renters do not have a property tax bill, so Minnesota uses a substitute: 20 percent of the annual rent you paid. If you paid $12,000 in rent over the year, the program counts $2,400 as your property tax equivalent.

Both groups use the same income limits and the same refund formula. The difference is only in how the housing cost is measured. A renter and a homeowner with the same income and the same housing cost (after the 20 percent calculation) would receive the same refund amount.

You must have paid rent or property taxes on your primary residence — the home where you actually lived. Vacation homes, rental properties you own, or homes you owned part of the year do not count.

Residency and ownership requirements

You must have been a Minnesota resident for the entire tax year. If you moved to Minnesota partway through the year, you are not may be able to access for that year's refund. Similarly, if you moved out of Minnesota before the year ended, you cannot claim the refund.

For homeowners, you must have owned your primary residence on December 31 of the tax year. If you bought the home in November, you still count. If you sold it in January of the following year, you still count for the previous year's refund. The key date is December 31.

For renters, you must have rented your primary residence for at least part of the tax year, though the full-year residency rule still applies. You cannot claim a refund for a year when you lived in Minnesota for only part of the time.

How the refund amount is calculated

Minnesota uses a progressive formula: the lower your income, the higher the percentage of your housing costs that the state will refund. The formula also accounts for family size, because a household with dependents has different needs than a single person with the same income.

The state first determines what percentage of your income went to property taxes or rent. Then it applies a refund rate based on your income level and family size. High-income households near the cutoff receive little or nothing; low-income households receive a larger share of their housing costs back.

The maximum refund amount is capped by state law, so even if your housing costs were extremely high, the refund will not exceed that cap. The cap also changes annually. Tax software and the Minnesota Department of Revenue's online calculator will show you an estimate based on your specific numbers.

Filing for the refund on your state tax return

You claim the property tax refund by completing Form M1PR and attaching it to your Minnesota state income tax return. If you use tax software, the program will ask you questions about your property taxes or rent and your residency, then calculate the refund automatically.

You will need your property tax statement (for homeowners) or documentation of rent paid (for renters). Many landlords provide a rent receipt or lease; if yours does not, you can use cancelled checks, bank statements, or a written statement from your landlord showing the amount and dates of payments.

If you file by paper, you must include Form M1PR with your return. If you file electronically, the form is included in the tax software. The Minnesota Department of Revenue processes the refund as part of your overall state tax return — it may reduce taxes you owe, increase a refund you are receiving, or be paid to you separately if you have no other state tax liability.

What happens if your income changes mid-year

The refund is based on your total household income for the entire tax year, reported on your state income tax return. If you earned $50,000 in January through June and then lost your job, your annual income for the year is still $50,000 — the refund calculation uses that full-year figure.

Household income includes wages, self-employment income, Social Security, pensions, interest, dividends, and other sources. It also includes income of your spouse if you file jointly. The definition of household income is the same as on your federal return, with a few Minnesota-specific adjustments.

If your income was below the limit for most of the year but crossed it by year-end, you still use the full-year total. This means you might not receive a refund even though your income was low for most of the year. Conversely, if you had a very low income but received a large one-time payment late in the year, that payment counts toward your annual total and may reduce or eliminate your refund.

Frequently Asked Questions

Can I claim the property tax refund if I own a condo or townhouse?

Yes. If you own the property and paid property taxes on it, you report those taxes on the refund form. Condo and townhouse owners are treated the same as single-family homeowners. If you pay a homeowners association fee but no property tax (because the association pays it), you would report zero property taxes.

What if I paid property taxes to two different states in the same year?

Minnesota's refund is based only on property taxes paid on your primary residence in Minnesota. If you owned homes in two states, you report only the Minnesota property taxes. You may also be able to claim a refund in the other state if you lived there long enough to meet its residency rules.

Do I have to file a state income tax return to get the property tax refund?

Yes. The refund is claimed on your Minnesota state income tax return. If your income is too low to require a return, you can still file one to claim the refund. The Minnesota Department of Revenue can provide information about whether you must file or whether filing is optional for your situation.

Can I claim the refund for a year I already filed?

Yes. You can amend a prior-year return using Form M1-X if you forgot to claim the refund or if your information has changed. You generally have three years from the original due date to claim a refund you missed, though the exact important date depends on your situation.

What if I lived with my parents and they claimed me as a dependent?

You cannot claim the property tax refund if someone else claims you as a dependent on their return. Your parents would need to claim the refund based on their property taxes or rent, not yours. Only the person who files the tax return can claim the refund.