The tax code is riddle with nuances. Some of these nuances are beneficial to clients, others can be frustrating. Recently, I had an estate administration client come to me with a letter from the Minnesota Department of Revenue stating that a decedent’s property tax credit was being adjusted to $0.00. Unfortunately, the letter failed to site Minnesota Revenue’s statutory authority and so I reviewed our Minnesota Statutes.
Most homeowners are familiar with the MN property tax credit form. It is a fairly simple form individuals complete during tax season and it is usually submitted with your MN income taxes. The decedent in this case had properly filed his form before he passed away but he died before receiving his property tax refund. The relevant statute, Minn. Stat. 290A.18, subdivision 1, states:
If a person entitled to relief under this chapter dies prior to receiving relief, the surviving spouse or dependent of the person shall be entitled to file the claim and receive relief. If there is no surviving spouse or dependent, the right to the credit shall lapse.
Since the decedent in this case had no surviving spouse or dependent at the time of his death and he died prior to receiving his property tax refund, the credit lapsed and the estate had no right to claim the credit. Although we cannot plan around this issue, it may be an incentive for some individuals to file their tax returns early.