2010 Minnesota Certificate of Rent Paid
Oh it is that time of year again. Boy does that sneak up on me. I can’t believe we are already past the holidays and into 2011. If you are new to the game, each year in January we as landlords need to fill out what is called a Certificate of Rent Paid or a CRP. Some tenants will call it a tax rebate (which it is not), but whatever.
Here is the link to the MN CRP 2010. This form doesn’t change from year to year so if you did it last year, you are in luck. Otherwise here are some quick tips:
- When figuring out the totals, do not include any damage deposits, late fees, or other non-rent payments in the total amount. Also, only include actual rent paid, not rent billed (or accounts receivable).
- Any rental subsidy amounts (including section 8 and other non-profit agencies) should not be included in the total line on the CRP. Only include rent paid by the tenant(s). In your accounting system remember to mark each subsidy payment in the memo field to make this easier at the end of the year.
- When calculating the total amount, you must divide the total rent paid by the total number of adults in the unit, regardless of how much rent each paid. Married renters are considered one person, again regardless of how they paid. You should then send a form to each adult. This may cause some frustration among roommates, but just tell them you are simply following the instructions.
- If you have many 2009 Certificate of Rent Paid forms to send, I recommend that you fill in a copy of the form with your business information and make copies of that original CRP to save yourself time. With almost 30 rental units, you can imagine how much time this saves me!
- Alternatively, the Certificate of Rent Paid form comes in a PDF format, so I purchased a copy of Adobe Acrobat and opened the PDF in edit mode. I then entered my business info once and then simply changed the property and tenant info and printed them out (I am faster at typing than writing!).
- Often you will have tenants that have moved out during the year. Personally, I just wait for past tenants to call me and request the CRP.
- Lastly, make a copy of all of the Minnesota CRPs for yourself. I will always get a least 2-3 calls in August (when the tenants turn these in for their taxes) from someone looking for a new copy. It will save you having to recreate the wheel when they lose their copy.
Remember that this form must be mailed to your tenants by January 31, 2011. I have had the question over the years about what happens if the landlord doesn’t send it. It could be a $100 fine if a tenant can prove you neglected to send it. Not sure how they prove that, but you gotta do it, so get it done.
In years past, I have stayed away from any automated software to generate the Minnesota Certificate of Rent form. The companies usually wanted a couple hundred dollars for their software. Well I guess they rethought their business model. CRP Gen now has a pricing model that costs only $1 per CPR (but you must spend at least $25). Despite the $25 minimum, I may consider that this year. If you have more than 10 rental units, I would use it to save time. Check it out here.
You have 3 weeks to fill these out. If you have many to do, just do it like I do…Turn the music up, get a beer and do 5-10 per night until you are finished. Makes them go by faster!
Great post! Thanks for the info, knocking this out right now!
A few clarifying comments:
1: Only include actual rent paid TO A MAXIMUM of the rent owed for that CRP year. If the tenant’s rent is $1000 per month, but they didn’t pay the December rent the previous CRP year until sometime in the current CRP year, you may then have received $13,000 this CRP year but can only give them credit for $12,000. That is a good incentive to a chronically late paying tenant in that they must pay you all the rent for a CRP year by December 31st in order to receive their maximum rebate from the State.
2: It is not legal to just wait for an ex-tenant to call. You must send out ALL CRPs to ALL tenants that paid any amount of rent during the CRP year by Jan 31st of the following year. As each tenant moves out, I get their forwarding address from them, which you need anyway to refund their deposit. If they don’t want to give their forwarding address, just say “I need the forwarding address so I can send you your CRP form, as the State Law requires, so you can collect the state money rebate”. Once I have their forwarding address, I THEN sit down and fill out a CRP for them and put 2 copies in a folder to wait for the rest until year end. That many are done and ready to send out. Although the law allows you to send them out anytime before Jan 31st of the following year, I like to send out the entire batch at the same time and with the same date following my signature for all tenants.
3: You actually have MORE than 3 weeks to fill the CRPs out if you start earlier. I fill out and send the CRPs as soon as I’ve received all the December rents, which is usually by December 10th. The tenants are happy and there are fewer taxing issues waiting to work on in the new year.