Thursday, February 17, 2011

“Property tax credit bill may help seniors” plus 2 more

“Property tax credit bill may help seniors” plus 2 more

Property tax credit bill may help seniors

Posted: 16 Feb 2011 09:37 PM PST

CHARLESTON, W.Va. -- Senior citizens might find it easier to get property tax relief under a bill passed Wednesday in the House of Delegates.

Members voted unanimously in favor of House Bill 2949, which is designed to both simplify the state's property tax relief programs as well as increase the amount of aid some low-income seniors can receive.

The bill evolved out of a recommendation from former Gov. Joe Manchin's Tax Modernization Project.

State Deputy Revenue Secretary Mark Muchow, who served on the project, said the current state code dealing with property tax relief for seniors was found to be confusing and hard to navigate.

"We have four separate alternative programs senior citizens have to work their way through to find out which is best," Muchow said.

Relief programs beyond the longstanding, $20,000 Homestead Exemption for seniors were created over the past decade as separate ways to ease the tax burden on seniors in the face of significant increases in property tax values.

The first came in 2003, when the state created a senior citizens income tax credit for property taxes paid on the first $10,000 of a home's assessed value, provided the senior's income was below 150 percent of the federal poverty level.

In 2007, that benefit was doubled to cover taxes paid on the first $20,000 of assessed value. This refundable credit program - that means a senior could claim a payment even if they had no tax liability - provided nearly 43,000 state taxpayers $8.2 million in tax relief in 2009.

A separate tax credit program, referred to as a "circuit breaker," was created in 2008 to help any senior and disabled residents whose property tax liability exceeded 4 percent of their gross household income. Qualifying seniors could receive up to a $1,000 personal income tax credit under that program.

However, an individual senior could apply for only one of the two programs, and it was up to them to decide which one was more beneficial.

Then the state created two more property tax deferment and credit programs in 2007 and 2008 to aid senior citizens living in areas significantly affected by the nationwide housing price bubble. The programs went unused in 2009 and 2010, with no taxpayer claiming or receiving benefit.

To streamline the system, lawmakers now want to scrap the two unused programs and reform the way homeowners apply for the other two credits.

The bill also redefines a low-income senior as any individual or household living below 300 percent of the federal poverty level. That would include individuals with less than $32,490 a year, or a family of two with less than $43,710.

Those above that limit would be ineligible for benefits.

CHARLESTON, W.Va. -- Senior citizens might find it easier to get property tax relief under a bill passed Wednesday in the House of Delegates.

Members voted unanimously in favor of House Bill 2949, which is designed to both simplify the state's property tax relief programs as well as increase the amount of aid some low-income seniors can receive.

The bill evolved out of a recommendation from former Gov. Joe Manchin's Tax Modernization Project.

State Deputy Revenue Secretary Mark Muchow, who served on the project, said the current state code dealing with property tax relief for seniors was found to be confusing and hard to navigate.

"We have four separate alternative programs senior citizens have to work their way through to find out which is best," Muchow said.

Relief programs beyond the longstanding, $20,000 Homestead Exemption for seniors were created over the past decade as separate ways to ease the tax burden on seniors in the face of significant increases in property tax values.

The first came in 2003, when the state created a senior citizens income tax credit for property taxes paid on the first $10,000 of a home's assessed value, provided the senior's income was below 150 percent of the federal poverty level.

In 2007, that benefit was doubled to cover taxes paid on the first $20,000 of assessed value. This refundable credit program - that means a senior could claim a payment even if they had no tax liability - provided nearly 43,000 state taxpayers $8.2 million in tax relief in 2009.

A separate tax credit program, referred to as a "circuit breaker," was created in 2008 to help any senior and disabled residents whose property tax liability exceeded 4 percent of their gross household income. Qualifying seniors could receive up to a $1,000 personal income tax credit under that program.

However, an individual senior could apply for only one of the two programs, and it was up to them to decide which one was more beneficial.

Then the state created two more property tax deferment and credit programs in 2007 and 2008 to aid senior citizens living in areas significantly affected by the nationwide housing price bubble. The programs went unused in 2009 and 2010, with no taxpayer claiming or receiving benefit.

To streamline the system, lawmakers now want to scrap the two unused programs and reform the way homeowners apply for the other two credits.

The bill also redefines a low-income senior as any individual or household living below 300 percent of the federal poverty level. That would include individuals with less than $32,490 a year, or a family of two with less than $43,710.

Those above that limit would be ineligible for benefits.

Also under the proposed new system, low-income seniors would be able to apply for both the refundable credit and circuit breaker programs.

The state Tax Department wasn't able to give exact figures on how many of the state's nearly 281,000 senior citizens would be affected by the new proposal, but did indicate that about 50 percent of state residents who filed taxes last year fell below 300 percent of the federal poverty level.

"No longer do you have to choose between one or the other," Muchow said. "If you qualify, you can now get both."

That could serve to lower some senior citizens' net tax liability.

For instance, a widow living off $18,000 income in a $300,000 house in Shepherdstown - which has seen significant property increases over the past decade - currently pays $1,993 in property taxes.

Under current law, she would be eligible for the $1,000 circuit breaker credit, reducing her net tax liability to $993. But under the new bill, that woman also could apply for the refundable credit and receive an additional $256 tax credit - reducing her liability by 26 percent.

According to the U.S. Census Bureau's latest data, the median home price in West Virginia is $91,400.

But Muchow pointed out that seniors could end up saving in other ways.

"Because of the complexities of current law, there are some senior citizens in the state that choose the wrong tax credit," Muchow said. "This gets rid of all of that confusion by providing one program and puts the benefits of both all together.

"The idea is to come up with something that simplifies the tax code and the credits without having to go to a tax preparer for some guidance that might cost you more than what you might save."

The bill is not expected to affect state revenues, Muchow said.  

It now moves onto the state Senate for further consideration.  

Contact writer Jared Hunt at jared.h...@dailymail.com or 304-348-5148.

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Property tax/rent rebate claim forms available online

Posted: 17 Feb 2011 02:56 PM PST

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Property Tax/Rent Rebate claim forms are available at State Rep. Doyle Heffley's website at RepHeffley.com.

SK commercial property taxes skyrocket this year

Posted: 17 Feb 2011 12:50 PM PST

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It was a box of chocolates that came addressed to Bay Street business owners on Valentine's Day. For many, it was a jaw-dropping property tax assessment that seems more appropriate for April Fool's Day.
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