Elderly and Disabled Homeowner and Renters Property Tax Credit (Circuit Breaker)

State

Iowa

Year

2021

Variations in Receipt of Benefit

Benefit Varies with Income

Benefit Type

Circuit Breaker

Benefit

For both homeowners and renters, the benefit is based on 6 income brackets. For renters, property taxes are calculated as 23% of gross rent paid by claimant or claimant's household. The 2021 benefit for homeowners includes 6 income brackets, ranging from 100% of property taxes paid for income below $12,469.99, to 25% of property taxes paid for income between $21,272 to $24,205.99. For renters, property taxes are calculated as 23% of gross rent paid by claimant or claimant's household with benefit determined by the same range for homeowner. The maximum benefit is based on actual taxes not to exceed $1,000. Renters receive a direct benefit payment. If the general homestead credit is larger than this credit, than there is no credit but no refund shall be required.

How is Benefit Disbursed

Credit to the property tax bill

Eligible Property Type

Residential

Characteristics of Eligible Property

Only homesteads are eligible. “Homestead” means the dwelling, owned or rented, and used as a home by the claimant along with land surrounding it. This may include one or more contiguous lots or tracts of land, as is reasonably necessary for use of the dwelling as a home. A homestead may consist of a part of a multi-dwelling or multipurpose building and a part of the land upon which it is built. It does not include personal property except that a manufactured or mobile home may be a homestead.

Eligibility Criteria

Age

Disability

Homeowner

Income Ceiling

Renter

Description of Eligibility Criteria

Applicants must be at least 65 years of age and not older than 70 years of age, or 100% disabled. For homeowners and renters, household income in 2020 must be less than $24,205.99 to qualify in 2021. Household income means all income of the claimant and the claimant's spouse in a household and actual monetary contributions received from any other person living with the claimant during their respective twelve-month income tax accounting periods ending with or during the base year. For renters, household income also includes housing benefits. Applicants must return a completed application to their county treasurer on or before June 1st . Or, if the treasurer has extended the filing deadline, on or before September 30th. The Director of Revenue may extend the filing deadline through December 31st, for good cause.

Local Option in Adoption of Program

Local government is unable to exercise an option

Local Option Regarding Program Features

No local option regarding program features

State Funding for Local Tax Loss

State reimburses all of the local government tax loss

Description of State Funding for Tax Loss

The amount of the credit for property taxes due for a homestead shall be paid on 15 June of each year by the director to the county treasurer who shall credit the money received against the amount of the property taxes due and payable on the homestead of the claimant. Statutes require that funds are annually appropriated from the general fund of the state to the elderly and disabled property tax credit and reimbursement fund, from funds not otherwise appropriated, an amount sufficient to implement this benefit. If a state appropriation is not sufficient to fully fund the credit or exemption, the political subdivision shall be required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue to be funded by the state appropriation.

Record ID

IA101_RR21

Footnotes

Effective 1 July 2021, eligibility criteria includes (1) a person who has attained the age of sixty-five years but who has not attained the age of seventy years on or before December 31 of the base year; (2) a person filing a claim for credit or reimbursement under this subchapter who is totally disabled and was totally disabled on or before December 31 of the base year; or (3) a person filing a claim for reimbursement under this subchapter who has attained the age of sixty-five years on or before December 31 of the base year and who is domiciled in this state at the time the claim is filed or at the time of the person’s death in the case of a claim filed by the executor or administrator of the claimant’s estate. This was put into effect by 2021 Iowa Acts ch. 177 § 125. Income levels are adjusted annually by the gross domestic product price deflator computed for the second quarter of the calendar year by the Bureau of Economic Analysis of the United States Department of Commerce. Totally disabled means the inability to engage in any substantial gainful employment by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or is reasonably expected to last for a continuous period of not less than 12 months. A person who is eligible to file a claim for credit for property taxes due with a household income in the lowest bracket who has an unpaid special assessment levied against the homestead may file a claim for a special assessment credit with the county treasurer. The claim filed by the claimant constitutes a claim for credit of an amount equal to the actual amount due upon the unpaid special assessment, plus interest, payable during the fiscal year for which the claim is filed against the homestead of the claimant. Beginning in 1995 a person who has attained the age of 23 or a head of household and was not claimed as a dependent on any other person's tax return for the base year is eligible by statutes for this program if they meet income requirements. However, the state has never provided funding for this portion of the program.

Sources

Iowa Code § 25B.7;
Iowa Code § 422.4;
Iowa Code § 425.17;
Iowa Code § 425.19;
Iowa Code § 425.23;
Iowa Code § 425.24;
Iowa Code § 425.29;
Iowa Code § 425.40 (in effect for 2021)
Iowa Department of Revenue, 2021 Property Tax Credit Claim, (2021)
[https://tax.iowa.gov/sites/default/files/2021-01/2021IowaPropertyTaxCreditClaimandInstructions%2854001%29.pdf Accessed 01/20/2022]
View Archived Source
Iowa Department of Revenue, Property Tax Credits and Exemptions Web Page
[https://tax.iowa.gov/property-tax-credits-and-exemptions#Disabled Accessed 01/20/2022]
View Archived Source
2021 Iowa Acts ch. 177 § 125

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