A recently enacted piece of legislation known as the “Birmingham” bill or the “Circuit Breaker” bill may benefit some of the Senior population, but not until they file their Calendar year 2001 income taxes. “Circuit Breaker” State Tax Credit for low and moderate income Seniors with high property taxes.
· First year of implementation will be for the calendar year 2001 income tax filing.
If more than 10% of a tax payers annual income goes to paying real estate taxes,
· there may be a refundable state tax credit available *if* the following eligibility requirements are met:
Minimum Age Maximum Income Maximum Valuation
65 (S)$40,000 (M)$60,000 $400,000
The maximum allowable amount of the credit will be as follows:
Maximum Credit Amounts
$375 1st year of implementation
$750 Succeeding Years
The actual allowable amount is based on the real estate tax assessed in excess of the 10% figure, not to exceed the maximum credit figures**
** Example – a husband and wife have a combined income of $50,000. The assessed value of their domicile is $300,000. The annual real estate tax is $5,497.80.
· The real estate bill is $497.80 in excess of 10% of the income.
· The amount of the tax credit, the first year of implementation will be $350.00.
· The following year (if the figures were to remain the same) will be $497.80.