Senior Circuit Breaker Tax Credit increases to $980 for 2011

 

 

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Senior Circuit Breaker Tax Credit increases to $980 for 2011

via Commonwealth Conversations: Revenue by Robert Bliss on 9/30/11

Posted by:

Robert Bliss, Director of Communication, Department of Revenue

The Department of Revenue published yesterday the Technical Information Release that presents the new income, valuation and credit amounts for the Senior Circuit Breaker Tax Credit for tax year 2011.

The $980 maximum value of this credit for tax year 2011 is $10 more than the previous year.

There is no other refundable state tax credit that puts more money into the wallets of taxpayers 65 and older than the Senior Circuit Breaker Tax Credit. In tax year 2009, the most recent tax year for which complete information is available, 80,566 taxpayers received $61.1million in cash or credits used to lower income tax payments, an average of $759 per taxpayer. 

The circuit breaker tax credit is based upon the actual real estate taxes -- or rent -- paid by a taxpayer who is eligible to claim the credit.

It is equal to the amount by which the taxpayer's property tax payments in the current tax year, including water and sewer charges but excluding any abatement or exemption granted, exceeds 10 percent of the taxpayer's total income, provided that the credit does not exceed the maximum credit amount for tax year 2011 of $980.

A taxpayer's total income may not exceed $52,000 for a single individual who is not head of a household, $65,000 for a head of household, and $78,000 for a married couple filing jointly.

The maximum assessed valuation of a residence may not exceed $729,000, which is down from last year's maximum valuation of $764,000, reflecting a decline in the valuation of homes.

The credit also works for renters. It is equal to the amount by which 25 percent of the rent actually paid during the taxable year exceeds 10 percent of the taxpayer's total income, with the credit capped at $980.

How does this credit work in practice? Take the example of a married couple with an annual income of $60,000 and $8,000 in property tax and water and sewer bills for their home. Ten percent of their income is $6,000 and their combined property tax and water and sewer bills total $8,000, which is $2,000 more than 10 percent of their income, so they qualify for the maximum credit of $980.

For a married couple filing jointly that rents, take the example of a married couple with a $28,000 income who pay $12,000 annually in rent. Ten percent of their income is 2,800, which is $200 less than 25 percent of their rent, so they qualify for a credit of $200.

If you are eligible, you can go back three years and claim the credit retroactively. If you owe tax, the credit is deducted from the amount owed. And if you don't owe tax, the state cuts you a check. It's worth taking a few minutes to do the math on this.

Historic information on the number and amount of credits issued to taxpayers in each of the Commonwealth's 351 cities and towns over the years is published on DOR's web page. Click on the link that says Senior Circuit Breaker Usage Report.

 

 

 

 

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Franklin residents gain with the Senior Circuit Breaker

The MA Dept of Revenue released numbers on the Senior Circuit Breaker program for all communities in the Commonwealth on Friday. Franklin does well with this credit. There has been steady growth in the number of filers, total credit received, and as a result the average credit per filer. The data released covers the tax years from 2001 through 2009. Now that the data is available, I'll watch to see when each new year is added to the table and update the numbers.

Tax Year	Number of Filers	Amount of Credit Claimed	Average Credit
2001	87	$28,251	$325
2002	109	$66,448	$610
2003	150	$90,818	$605
2004	171	$107,020	$626
2005	202	$122,377	$606
2006	234	$158,800	$679
2007	248	$173,524	$700
2008	302	$217,429	$720
2009	324	$240,692	$743

Of the 335 communities where residents did receive the credit Franklin ranked 90th in the total number of filers. Franklin ranked 89th in total credit received but dropped to 175th in average credit received.


What is the Senior Circuit Breaker?

No other refundable tax credit equals the Senior Circuit Breaker Tax Credit for putting money into the wallets of average taxpayers 65 and older. In tax year 2009, more than 77,000 senior taxpayers who were either homeowners or renters received credits of nearly $60 million. 

Yet it is safe to say that many eligible taxpayers have never heard of the credit. If you are reading this and have older relatives or friends who might benefit, pass on the word. The maximum credit, after all, is worth $970 in the coming tax year. 

The Department of Revenue has just released the rules and regulations for the Senior Circuit Breaker Tax Credit in tax year 2010. The credit is based on the actual property tax or rent paid by the eligible taxpayer who is either living in their own home or paying rent. 

A taxpayer's total income may not exceed $51,000 for a single individual; $64,000 for a head of household; or $77,000 for married couples filing a joint return. The assessed valuation of a residence may not exceed $764,000. Many taxpayers 65 and over fall within these limits. 

The credit is equal to the amount by which the taxpayer's property tax payments in the current tax year, including water and sewer charges but excluding any abatement or exemption, exceeds 10 percent of the taxpayer's total income. 

The credit also works for renters. It is equal to the amount by which 25 percent of the rent actually paid during the taxable year exceeds 10 percent of the taxpayer's total income, with the credit capped at $970.

For additional info on the credit, check the State website here

To view (or download) the data from the state, check the web page here

The table of Franklin's data is also posted as a Google document and can be found here. I pulled from each year, the data specific for Franklin to make this table. The info in this table drove the chart and table found above.

Related post on credits or abatements for seniors
http://franklinmattersweekly.blogspot.com/2010/03/fmw-59-week-ending-3710.html


Franklin, MA

"No other refundable tax credit equals the Senior Circuit Breaker Tax Credit"

No other refundable tax credit equals the Senior Circuit Breaker Tax Credit for putting money into the wallets of average taxpayers 65 and older. In tax year 2009, more than 77,000 senior taxpayers who were either homeowners or renters received credits of nearly $60 million.

Yet it is safe to say that many eligible taxpayers have never heard of the credit. If you are reading this and have older relatives or friends who might benefit, pass on the word. The maximum credit, after all, is worth $970 in the coming tax year.

The Department of Revenue has just released the rules and regulations for the Senior Circuit Breaker Tax Credit in tax year 2010. The credit is based on the actual property tax or rent paid by the eligible taxpayer who is either living in their own home or paying rent.

A taxpayer's total income may not exceed $51,000 for a single individual; $64,000 for a head of household; or $77,000 for married couples filing a joint return. The assessed valuation of a residence may not exceed $764,000. Many taxpayers 65 and over fall within these limits.

The credit is equal to the amount by which the taxpayer's property tax payments in the current tax year, including water and sewer charges but excluding any abatement or exemption, exceeds 10 percent of the taxpayer's total income.

The credit also works for renters. It is equal to the amount by which 25 percent of the rent actually paid during the taxable year exceeds 10 percent of the taxpayer's total income, with the credit capped at $970.

Read the full posting here:
http://revenue.blog.state.ma.us/blog/2010/10/senior-circuit-breaker-tax-credit-delivers-big-bucks-.html

Spread the word amongst the seniors you know, this could be something to help them!




Franklin, MA

"not 'welfare' - it is an entitlement"

By Joyce Kelly/Daily News staff

GHS

Posted Oct 20, 2008 @ 12:41 AM

Last update Oct 20, 2008 @ 12:44 AM

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Worried about seniors living paycheck to paycheck this winter, area senior center directors say they are making an all-out effort to help them.

Now, more than ever, it is crucial that struggling seniors take advantage of programs they are entitled to, said Bellingham Outreach Coordinator Sheila Ronkin: tax abatements, fuel and food assistance, and circuit breakers.

"It was very important before the economy fell apart, but now, some of these folks live really threadbare lives. Without some help, they're not going to have enough heat or food. Even folks more well-heeled may not be able to buy Christmas presents or birthday presents for their loved ones," said Franklin Senior Center Director Karen Alves.

Many seniors don't realize they qualify for tax credits or other assistance, so they don't even bother to apply, Alves said. But that is a mistake.

Through the state's circuit breaker program, seniors can get up to $900 a year in real estate tax abatements if they pay more than 10 percent of their gross income in taxes, and that includes water and sewer fees, Alves said.

So if a senior makes $30,000 a year, pays $3,000 in real estate tax, plus $500 for water and sewer ($3,500 in taxes), they can get $500 back from the state, she said.

Read the full article in the Milford Daily News here