Minnesota's property tax refund is based on your household income and the property taxes you paid in the previous year
Minnesota's Homestead Property Tax Refund (also called the Property Tax Refund) pays back a portion of the property taxes you paid on your primary residence. The state calculates your refund by comparing your household income against a threshold that changes each year. If your income falls below that threshold, you receive money back; the lower your income, the larger the refund. The refund is based on property taxes you paid during the previous calendar year, not the current one.
The calculation itself is straightforward: the state takes your household income, subtracts the income threshold for that year, and applies a percentage to the difference. That percentage also changes annually. For the 2023 tax year (refunds paid in 2024), the income threshold was $89,340 for most households. If you earned less than that, you were in line for a refund. The exact amount depends on how far below the threshold you fell and how much property tax you actually paid.
Key Takeaways
- Your refund is calculated using your household income from the previous year compared to an income threshold that the state sets annually.
- The income threshold for 2023 was $89,340, but this number changes each year based on inflation and legislative action.
- You must own and occupy your home as your primary residence on December 31 of the year you're claiming the refund for.
- Minnesota sends refunds by mail or direct deposit, typically between May and July, based on when you filed your state income tax return.
- You claim the refund on your Minnesota state income tax return; you do not need to file a separate form.
The income threshold and refund percentage change every year
Minnesota adjusts both the income threshold and the refund percentage annually. The threshold is tied to inflation, so it typically rises each year, though the percentage may stay the same or shift depending on state budget decisions. For tax year 2022, the threshold was $87,650. For 2023, it rose to $89,340. For 2024, it increased again. You can find the current year's threshold on the Minnesota Department of Revenue website under "Property Tax Refund" or by calling their individual income tax line.
The refund percentage—the amount of property tax you get back for each dollar of income below the threshold—also varies. In recent years, it has ranged from roughly 5% to 6% of the difference between your income and the threshold, but this is not fixed. The state legislature can adjust it during budget sessions. Always check the Department of Revenue's current-year instructions to confirm both figures before calculating what you expect to receive.
How the state calculates the exact refund amount
The formula works like this: take your household income, subtract the income threshold for that tax year, multiply the result by the refund percentage, then compare it to the property taxes you actually paid. Your refund is whichever amount is smaller. This means the refund cannot exceed the property taxes you paid, even if the income calculation suggests a larger amount.
For example, if the 2023 threshold was $89,340, the refund percentage was 5.5%, and your household income was $75,000, you would subtract $75,000 from $89,340 to get $14,340. Multiply $14,340 by 5.5% to get $789.27. If you paid $1,200 in property taxes, your refund would be $789.27. If you paid only $500 in property taxes, your refund would be capped at $500. The state uses the property tax amount from the previous calendar year, which appears on your property tax statement or assessment notice.
Household income includes all family members' earnings
Household income for the refund calculation includes wages, self-employment income, Social Security, pensions, interest, dividends, and rental income from all household members who file taxes together. It does not include certain types of income like workers' compensation or some veteran benefits, but those are exceptions. If you file a joint return with a spouse, both incomes count. If you file as head of household and have adult children living with you who file their own returns, only your income counts toward the threshold.
The income figure the state uses is your Minnesota taxable income, which is what appears on your state income tax return after standard deductions and adjustments. You do not need to calculate household income separately; the Department of Revenue pulls it directly from your return. This is why filing your state income tax return is the only step required to claim the refund—you do not fill out a separate form or submit additional paperwork.
You must own and occupy your home on December 31
To receive a property tax refund, you must have owned your home and lived in it as your primary residence on December 31 of the tax year you are claiming the refund for. If you bought the house on December 30, you do not may have access to for that year's refund. If you sold it on January 2 of the following year, you still may have access to for the previous year's refund because you owned and occupied it on December 31.
The home must be your primary residence, not a rental property, vacation home, or investment property. If you own multiple properties, only the one you live in most of the time counts. If you moved during the year, the home you occupied on December 31 is the one that qualifies. Renters do not receive this refund; it is only for homeowners.
Property taxes used in the calculation come from the previous year
The property tax amount in the refund formula is based on taxes you paid during the calendar year before you file. If you are filing your 2023 tax return in 2024, the refund calculation uses property taxes you paid in 2023. Those taxes appear on your property tax statement, which your county assessor or tax collector sends out, usually in December or early January. If you paid property taxes through an escrow account as part of your mortgage payment, the lender's statement shows the amount paid on your behalf.
Some homeowners pay property taxes in installments across the year; others pay in one or two large payments. The refund calculation counts all property taxes paid during that calendar year, regardless of when you paid them. If you paid taxes for multiple properties, only the taxes on your primary residence count. If you are unsure of the exact amount, your property tax statement is the official source.
When Minnesota sends the refund and how to track it
Minnesota typically sends property tax refunds between May and July, though the exact timing depends on when you filed your state income tax return. If you filed early (February or March), your refund may arrive in May. If you filed closer to the April deadline, expect it in June or July. The state processes returns in the order they are received, so early filers get their refunds first.
You can track your refund status on the Minnesota Department of Revenue website using their "Where's My Refund?" tool. You will need your Social Security number and the refund amount (or an estimate based on the formula above). If you chose direct deposit on your tax return, the refund goes to the bank account you listed. If you did not choose direct deposit, the state mails a check. Direct deposit is faster and more reliable; if you have not already set it up, you can do so when you file next year's return.
What to do if your refund does not arrive or seems incorrect
If your refund does not arrive by late July, first check the "Where's My Refund?" tool to confirm the state processed your return and calculated a refund. If the tool shows a refund was issued but you have not received it, contact the Minnesota Department of Revenue. If you chose direct deposit, ask them to verify the bank account information on file. If you chose a mailed check, they can confirm the address it was sent to and may be able to issue a replacement if it was lost.
If you believe the refund amount is wrong, review the calculation yourself using the income threshold and percentage for that tax year. Confirm your household income matches what appears on your tax return and that the property tax amount is correct. If there is a discrepancy, contact the Department of Revenue with your return and property tax statement. Common errors include using the wrong income figure or including property taxes that do not may have access to (such as taxes on a rental property or a second home). The Department of Revenue can review your return and recalculate if needed.
Frequently Asked Questions
Do I have to file a separate form to get the property tax refund?
No. The refund is claimed automatically when you file your Minnesota state income tax return. You do not need to fill out a separate application or form. The Department of Revenue calculates the refund based on the income and property tax information on your return.
What if I rent my home to tenants instead of living in it?
Rental properties do not may have access to for the homestead property tax refund. The refund is only for homes you own and occupy as your primary residence. Landlords may be able to deduct rental property taxes as a business expense on their federal return, but that is a different benefit.
Can I claim the refund if I am a surviving spouse or own the home through a trust?
Yes, surviving spouses can claim the refund for the year of the spouse's death if they owned and occupied the home on December 31. Homes held in a revocable living trust can also may have access to if the trust owner lived in the home as a primary residence. Contact the Department of Revenue if your situation is unusual to confirm you meet the requirements.
What happens if my income is above the threshold?
If your household income is above the income threshold for that year, you do not receive a property tax refund. The threshold changes annually, so you may not may have access to one year but could may have access to the next if your income drops or the threshold rises enough.
Do I need to report the refund as income on my federal tax return?
No. The property tax refund is not taxable income for federal purposes. You do not need to report it on your federal return or include it in your household income for the following year's refund calculation.