Minnesota Certificate of Rent Paid
**2009 Update: The new Minnesota Certificate of Rent Paid is here.** This is just a reminder to all the Minnesota Investment Property Landlords in the audience. You are required to send a Minnesota Certificate of Rent Paid to your tenants by January 31, 2008.
This is a simple form that your tenant can use when submitting their taxes. Depending upon their income, they may be eligible for a tax deduction for a portion of the rent they paid for 2007. Although you must send your tenant this form, this does not affect any taxes you pay or anything else. It is simply for their tax purposes.
The instructions are rather lengthy (and like any other government form, rather confusing). Without going into great detail, here are some of the tips and tricks that I have figured out over the years:
- Only rent paid by the tenants is used in the calculation (any Section 8 or other rent subsidies are not included). In my accounting system, I mark each subsidy payment in the memo field to make this easier at the end of the year.
- Do not include any damage deposits, late fees, or other non-rent payments.
- I typically only include actual rent paid, not rent billed (or accounts receivable).
- Fill in a copy of the form with your business information and make copies to save yourself time when completing many of them. With almost 30 rental units, you can imagine how much time this saves me!
- I do not try and track down past tenants and send them these forms. If they are interested, I let them call me (again, there is no penalty for not sending these forms of for them being late).
- You must divide the rent paid by the total number of adults (married couples are considered 1 person) in the unit regardless of how much rent each paid. You should then send a form to each adult.
- To save on postage, I send their monthly statement in the same envelope.
You can purchase software packages or services to do this work for you, but I have always found they are expensive. The easiest way I found to get these done is do a couple each night until you have them all finished. Turn the music on and just fill them out!
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