"CIRCUIT BREAKER" TAX CREDIT
The states persistent fiscal crisis will probably compel many communities
across the state to take up Proposition 2 1/2 overrides in the coming months
to support local services. And where these overrides occur, many of our senior
citizens will face a dilemma: they can choose to support an override for something
they find worthwhile, and risk losing their homes and their standard of living
to do so; or they can side with those seeking to block the override and risk
being portrayed in their communities as turning their backs on the social
contract, the idea that older generations provide the same or better opportunities
to the younger generation.
Neither option is desirable. Growing older, the property tax and Proposition
2 1/2 should not be the stuff of intergenerational conflict in Massachusetts.
To help alleviate some of the stress property taxes and override questions
often create for senior citizens, the state is continuing to make available
a tax credit called The Circuit Breaker.
Its called the Circuit Breaker because its triggered,
like an electrical circuit breaker, when property tax payments exceed 10 percent
of a senior citizens annual income. Those who qualify will still be
required to pay property taxes to their local communities. But they will receive
a dollar credit for every dollar their property tax, and certain water and
sewer bills, exceed 10 percent of their annual income, up to the $790 maximum.
Senior citizens who rent their homes can also take advantage of the same dollar
for dollar credit, up to the same $790 maximum, if 25 percent of their annual
rent exceeds 10 percent of their annual income. This tax credit is in addition
to the rental deduction already provided under current state income tax law.
Here are the basic requirements for eligibility:
Must be a Massachusetts resident, age 65 or older;
Must own or rent residential property in Massachusetts as your primary residence;
Must have an annual income of $42,000 or less for a single filer; $53,000
or less for a head of household; and $63,000 or less for joint filers;
Must file a joint return if married;
Must not be a dependent of another tax filer;
Must not receive a federal or state rent subsidy directly, or live in a property
tax exempt facility;
Must not own property assessed at $425,000 or more.
No special application is required, but even seniors who do not owe any income
tax must file a 2002 state income tax form before the end of April 2003 deadline
to receive the credit. Official information packets from the state Department
of Revenue for 2002 state income tax returns will include Circuit Breaker
schedules and will be available in local libraries and post offices beginning
in January, 2003.
This is the second year of this program, so there are bound to be questions.
If you need more information, please dont hesitate to contact my office
at 617-722-1643, or the state Department of Revenue Customer Service Bureau
at 617-887-MDOR, or toll-free at 800-392-6089, or visit their website, www.massdor.com.
Last year, the Circuit Breaker Tax Credit helped 24,000 senior citizens across
the Commonwealth save roughly $8.1 million on their property taxes. Combined
with the already available property tax exemptions for senior citizens, the
Circuit Breaker will go a long way toward addressing the intergenerational
conflicts Proposition 2 1/2 overrides and other local spending proposals often
Our senior citizens have contributed much to our communities and have made
innumerable sacrifices for their children and grandchildren. For all that,
and more, they have earned our respect. This tax credit will enable seniors
to continue lending a hand to the younger generation by allowing them to judge
the merits of local spending proposals with much less concern over how the
property tax increase will affect their own quality of life. Our senior citizens
have earned this opportunity.
Questions or concerns? Please contact me at my office at (617)
my home at (617) 696-0200, or by email at [email protected]
Thank you for allowing me to work for you.
Newsletter Archive: No. 1 No.
SENATOR BRIAN A. JOYCE
State House, Room 413-A, Boston, Massachusetts 02133
Tel. 617-722-1643 Fax 617-722-1522 E-mail: [email protected]