"CIRCUIT BREAKER" TAX CREDIT

Dear Friend:
The state’s 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.”

It’s called the Circuit Breaker because it’s “triggered,” like an electrical circuit breaker, when property tax payments exceed 10 percent of a senior citizen’s 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 don’t 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 create.

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) 722-1643,
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. 2

SENATOR BRIAN A. JOYCE
State House, Room 413-A, Boston, Massachusetts 02133
Tel. 617-722-1643 Fax 617-722-1522 E-mail: [email protected]