Tax Relief for Seniors

Property Tax Exemptions, Deferrals, Credits, & Tax Breaks for Senior Citizens
FY 2018: July 1, 2017 - June 30, 2018

1)  Introduction

  1. By state law, exemptions or deferrals are allowed to qualified seniors. This information sheet is intended to answer questions for those individuals interested in lessening their tax responsibilities. Included in the programs described below are the more generous changes that The Town of Duxbury has adopted over the past few years. These programs offer the possibility of a tax reduction, a tax deferral and a tax credit for property taxes paid by seniors. Some of them are referred to by the names of the different clauses of Chapter 59, Section 5 of the Massachusetts General Laws.

2)  General Information

  1. What Is An Exemption? As used in the context of real estate taxes, an exemption is a release from the obligation to pay all or a portion of the taxes assessed on certain real property. Exemptions are conferred by the state legislature (Massachusetts General Laws, Chapter 59, Section 5) on particular categories of persons or property.  The categories of persons on whom exemptions are conferred are listed below, together with an explanation of the eligibility requirements for each. Exemptions are not abatements in that they do not affect the assessed valuation of the property. They simply reduce the taxes owed. All exemptions are subject to requirements regarding the ownership of the home (domicile).
  2. Applications: Applications for the various tax exemption programs are available from the Assessing Department.  An application must be filed with the assessors each year within three months of the mailing date of the third quarter actual tax bill.  The third quarter actual tax bill, is usually mailed in mid December each year.  Exemptions are not processed until this actual tax bill is generated. The filing of the exemption application does not release the Town from the collection of the tax, which should always be paid as assessed and as it appears on the tax bill. An exemption, even if received in prior years, is not automatically conferred.  Rather, it must be specifically acted upon each year by the Board of Assessors.  The Assessors’ action is discretionary only insofar as they determine that an applicant, according to the documentation he or she provides, does or does not meet the eligibility requirements.  Notice of the Assessors’ action will be sent to each applicant.
  3. Documentation: As exemptions are granted only for the primary residence, and as some exemptions are age dependent and/or means tested, an applicant must provide whatever information the Assessing Department deems to be reasonably required to establish eligibility. The information that an applicant may be requested to furnish includes, but is not limited to: (1) birth certificates, (2) evidence of domicile and occupancy, (3) income tax returns, (4) bank statements.

3)  Individual Exemption Programs

  1. Clause 17E: (Fiscal Year 2018 Cost of Living Amounts (C.O.L.A.) adjustments are reflected in the following $ amounts).
    1. Amount: $282.00
    2. Eligibility: As of the previous July 1st, an individual must be either (1) a surviving spouse or surviving minor child who owns and occupies the property as his or her domicile; or (2) a person at least 70 years old who has owned and occupied the property as his or her domicile for at least the five preceding years.
    3. Income: There are no income guidelines for Clause 17E.
    4. Assets: The applicant’s assets (cash, bank balances, stocks, bonds, some types of personal property, etc.) excluding the value of the domicile (up to three living units), cannot exceed $59,299.
  2. Clause 41D: (Fiscal Year 2018 Cost of Living Amounts (C.O.L.A.) adjustments are reflected in the following $ amounts).
    1. Amount: $1,000
    2. Eligibility: As of the previous July 1st, an individual must be at least 70 years old, must have owned and occupied the property for at least the five preceding years and must have been domiciled in Massachusetts for at least the ten preceding years.
    3. Income: The applicants gross receipts from all sources in the year preceding the application must not have exceeded $27,443 if single; $41,167 if married. (the applicable social security exclusion: $4,537 single; $6,803 if married have been included in those figures.)
    4. Assets: The applicant’s assets, excluding the value of the domicile (up to three living units) cannot exceed $54,891 if single; $75,474 if married.
    5. Applicants are required to bring copies of their Federal Tax Form 1040, proof of earnings from social security and any other source of income from calendar year 2016 and copies of bank and/or stock/bond/security statements showing balances as of July 1, 2017.
    6. Clause 18 or 18-A : Persons, who by virtue of age, financial condition and physical infirmity, or activated military status, and who are facing an unforeseen hardship in a given year, may request tax relief from the Board of Assessors in the form of a Clause 18 or 18-A exemption. The decision to grant a Clause 18 exemption is made solely at the discretion of the Board of Assessors.
  3. Exemption From The Community Preservation Act Surcharge
    1. In a November, 2002 ballot question, the voters of the Town voted to exempt persons who would qualify for low-income housing or low to moderate income senior housing (age 60 or older) from the Community Preservation Act (CPA) surcharge.
    2. To qualify for this exemption, the applicant’s income must be below certain levels.  Applicants must annually file an application and submit it to the Assessors Office prior to the deadline of April 3, 2018.  They must also include copies of their 2016 federal and state tax returns and/or any other documentation to verify any income or expenses claimed.  Income from all family members and all sources is considered in determining eligibility.  The income levels must be equal to or below that which is shown in the table below.
    3. The CPA surcharge will appear on the tax bill that will go out in December.  NEW FOR FY-2018 applications must be filed prior to the deadline of April 1, 2018. Application forms are available at the Assessing Department office, 781-934-1100, ext. 6010.
    4. Those who are currently participating in the Town’s existing tax exemption programs 41A and 41D have automatically received the CPA exemption and need not file a CPA exemption application. Any other exemption will reduce your CPA surcharge by one percent of that exemption amount; for a full exemption of the CPA in these cases a separate CPA exemption application is required.
  4. Other Exemption Programs:  In addition to the exemptions already described, there are several other kinds of property tax exemptions under Massachusetts General Laws, Chapter 59, Section 5:
    1. Varieties of Clause 22 exemptions are available for certain categories of disabled veterans and their families.
    2. Clauses 37 or 37A exemptions are available to a blind person.
    3. A Clause 42 exemption is available for a surviving spouse of a police officer or firefighter killed in the line of duty.
    4. A Clause 43 exemption is available to minor children of a police officer or firefighter killed in the line of duty.
    5. If you think you qualify for any of these exemptions, you may file an application with the Board of Assessors.

4)  Deferral of Property Taxes

  1. Clause 41A Tax Deferral: If you are unable to qualify for an exemption under any of the clauses described above, or if these exemptions do not help you enough in paying your real estate taxes, you might consider applying for a tax deferral under Clause 41A. A deferral permits you to delay payment on property taxes.
  2. If you qualify for a Clause 41A tax deferral, you enter into an agreement with the Assessing Department to defer payment of all or part of your taxes plus four percent interest. The deferred amounts can be increased year after year until they equal fifty percent of the assessed value of the property.
    1. Amount: Any or all of the taxes assessed may be deferred (not exempted), with interest, until such time as the property is sold or transferred, or until the demise of the owner, at which point the taxes and interest must be paid (If the payment is not made at this time, the interest rate increases to 16%).  The cumulative total of the taxes deferred cannot exceed fifty percent of the applicant’s share of the assessed value of the property. Entry into tax deferral creates a lien on the property, which is recorded by the Town at the Registry of Deeds.
    2. Eligibility: As of July 1 of the tax year, an individual must be at least 65 years old.
    3. Income: The applicant’s gross receipts from all sources in the year preceding the application cannot have exceeded $57,000.
    4. Assets: There are no asset guidelines for Clause 41A.

5)  Tax Work-Off Program

Under a program administered by the Council On Aging, the Town may provide residents over age 65 with a property tax reduction.  Up to $1000 can be deducted from the property tax in exchange for volunteer services, minus any applicable payroll deductions. The amount of the tax reduction is not subject to the Massachusetts personal income tax; but the federal income tax does apply.  Elder volunteers are considered public employees when volunteering.  For more information, seniors should contact the Council On Aging.

6)  The State Income Tax Circuit Breaker  (Contact your accountant for update)

  1. A Massachusetts income tax credit program is available to help eligible seniors reduce their property tax even further. This program provides a tax credit to assist low and moderate-income seniors in paying property taxes and utility charges. Under this program, eligible homeowners and renters receive a refundable credit on their state income taxes, if they file annual income tax returns (for the previous taxable year).
  2. To qualify for the credit on the Massachusetts 2016 tax return, a person must be at least 65 years of age or older before January 1, 2016 (for joint filers, it is sufficient if one taxpayer is 65 years of age or older), must own or rent residential property in the state, must occupy the property as his/her principal residence, and must not be the dependent of another taxpayer.  The taxpayer’s total income cannot exceed $56,000 for a single individual who is not the head of a household, $70,000 for a head of household, or $84,000 for a husband and wife filing a joint return. Married taxpayers must file a joint return to be eligible (even if only one spouse is 65 or older). In addition, the assessed valuation of the residence cannot exceed $691,000 as of January 1, 2015.  (Limits may be increased for 2015.)
  3. The amount of the credit a qualifying person is entitled to equals the amount by which the taxpayer’s property taxes, together with the eligible amount of that taxpayer’s water and sewer charges, exceed 10 percent of the taxpayer’s income.  The eligible water charge amount that is included in the tax credit for each taxpayer is 50 percent of the water charges in the tax year for which the credit is being sought. A taxpayer may not necessarily receive the full amount by which property taxes and utility charges exceed 10 percent of income, however. Rather, the legislation imposes a limit on the credit amount. The maximum credit allowed for the tax year 2016 is $1,050.00. The law contains language which automatically increases both the benefit amount and the eligibility limits in future years. The income, valuation, and credit limits adjust automatically in accordance with the Consumer Price Index.
  4. A senior who rents his/her domicile may also qualify for an income tax credit under the law. The program entitles a senior who rents his/her home to a credit if 25 percent of that senior’s rent exceeds 10 percent of his/her income, again up to statutory limits. A renter whose rent is subsidized by the state or federal government through rental assistance programs, however, does not qualify for the credit.
  5. It is advised that senior citizens who are interested in availing themselves of the State income tax circuit breaker program receive the advice of an income tax advisor.
  6. You may also visit Real Estate Tax Credit for Persons Age 65 and Older (known as the Circuit Breaker Credit) for additional information.

FY 2018 Community Preservation Act Surcharge Exemption Income Limits:

Number in FamilySenior (Age 60+) LimitNon Senior Limit