Purpose

Senior citizens in Massachusetts may be eligible to claim a refundable credit on their State Income Taxes for the real estate taxes paid on the Massachusetts residential property they own or rent which they occupy as their principal residence.

The maximum credit allowed is $1,030. For the tax year beginning January 1, 2013. If the credit due the taxpayer exceeds the amount of the total income tax payable for the year, the excess amount of the credit will be refunded to the taxpayer without interest.

Eligibility

Eligible taxpayers who own their property may claim a credit equal to the amount by which their property tax payments in the current tax year, (excluding any exemptions and/or abatement) including water and sewer debt charges, exceeds 10% of their “total income” for the same current tax year.

Taxpayers residing in communities that do not include water and sewer debt service in their property tax assessments may claim, in addition to their property tax payments, 50% of the water and sewer charges actually paid during the tax year when figuring the credit.

Renters

For renters, the law assumes that 25% of their rent goes toward property tax. Accordingly, renters may claim a credit in the amount by which 25% of their annual rental payment is more than 10% of their total income.

Income Requirements

For purposes of the tax credit, a taxpayer’s total income includes taxable income as well as exempt income such as social security, treasury bills and public pensions. Actual tax payments made are reduced by any abatements or exemptions received, monies earned through the Senior Work programs or penalty and interest charges due to delinquent payments.

Eligibility
To be eligible for the credit:

  • A taxpayer must be 65 years of age or older before January 1.
  • A taxpayer must own or rent residential property in Massachusetts and occupy the property as his/her principal residence (domicile).
  • The taxpayer’s total income cannot exceed $55,000 for a single filer who is not the head of a household, $69,000 for a head of household, or $82,000 for taxpayers filing jointly.
  • No credit is allowed for a married taxpayer unless a joint return is filed.
  • The assessed valuation of the real estate cannot exceed $700,000.
  • No credit is allowed if the taxpayer claims the married filing separate status, receives a federal or state rent subsidy, rents from a tax-exempt entity or is the dependent of another taxpayer.

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Tax Deferrals

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Frequently Asked Questions

Is the tax credit considered income?

Tax credits received by eligible taxpayers are not considered income for the purpose of obtaining eligibility or benefits under other means-tested assistance programs including food, medical, housing, energy and educational assistance programs.

How does a taxpayer claim the credit?

Taxpayers who are eligible for the tax credit can claim the credit by submitting a completed Schedule CB, Circuit Breaker Credit, with their state income tax returns.

Taxpayers who qualified for the tax credit in a prior year but did not file a Schedule CB with their original state income tax return should file an application for abatement, available on the Department of Revenue site. Also, taxpayers who qualified for the tax credit in a prior year and did not file a tax return should file a state income tax return with schedule CB. Either option must be completed within 3 years from the last date for filing the return, without regard to any extension of time to file.
Department of Revenue

What if the taxpayer is not required to file a state income tax return?

An eligible taxpayer who does not normally file a state income tax return may obtain a refund by filing a return with a schedule CB.

What documentation must the taxpayer keep?

As with all claimed tax credits and deductions, the taxpayer must keep all pertinent records, receipts, and other documentation supporting the claim for the credit.

 

Schedule CB and further information is available on the Department of Revenue website or by contacting the Massachusetts Department of Revenue’s customer Service Bureau at 617-877-6367 or toll free in Massachusetts at 800-392-6089. Department of Revenue