Columbia public housing tenants ineligible for tax credit

Friday, January 22, 2010 | 5:37 p.m. CST; updated 7:34 p.m. CST, Friday, January 22, 2010

COLUMBIA — Tenants of the Columbia Housing Authority accustomed to receiving rent tax credits in previous years now know that they are ineligible for them.

Although there has been no change in the law, volunteers with the American Association of Retired Persons who help tenants with tax returns have been notified that the rent tax credit, also known as the property tax credit, does not apply to public housing residents.

"Probably 50 to 100 Columbia taxpayers working with AARP will be affected," Cyrus Harbourt, coordinator of Columbia's AARP Tax-Aide program, said. "Obviously, no one losing money is in favor of it, but the law is relevant.”

Public housing tenants can’t claim the rent tax credit because housing authorities don’t pay property taxes. Some residents who learned from the AARP that they could not claim the credit thought that there had been a revision of Missouri statutes. The law, however, has been in effect since 1975.

"The terms 'rent tax credit' and 'rent rebates' are commonly used terms for the property tax credit. They are one and the same,” Missouri Department of Revenue spokesman Ted Farnen said in an e-mail. “The whole point of the property tax credit is to provide a credit or refund to people who own or live on property on which a property tax is actually paid.”

Missouri tax law allows those eligible to get a credit equal to 20 percent of the gross rent paid to the owners of the properties where they live, up to $750.  

At a meeting held in St.Louis in early December, those who train AARP tax counselors learned they had been mistakenly helping public housing tenants claim the credit.

Phil Steinhaus, chief executive officer of the Columbia Housing Authority, said the situation surprised some tenants. Farnen, however, emphasized that the law has remained the same.

“The discussion on this issue has created wider knowledge of the law, but nothing with the actual law has changed,” Farnen said.

As of Dec. 23, the revenue department had processed 260,130 property tax credit claims, and it issued credits or refunds to 219,711 of those taxpayers. The rest were deemed ineligible. Altogether, the credits issued were worth $119.6 million, and the average individual credit was $544.

Farnen said that about 4,026 property tax credit claims had come from Boone County as of May 4, and 3,431 resulted in credits or refunds. Farnen also said the vast majority of tax returns had been processed by that time. The total refunds for Boone County were $1.9 million, and the average individual refund was $550.

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