Real Estate Tax Credit for Persons Age 65 and Older (Circuit Breaker Credit)

State

Massachusetts

Year

2020

Variations in Receipt of Benefit

Benefit Varies with Income

Benefit Varies with Taxes Due

Minimum Tax Amount Must be Paid

Benefit Type

Circuit Breaker

Benefit

The benefit is a refundable credit to the income tax bill equal to the amount by which real estate tax payments (or rent constituting tax) exceeds 10% of income. Rent constituting real estate tax for renters is 25% of rent paid. The maximum credit paid based on tax year 2019 income and paid in 2020 is $1,130.

How is Benefit Disbursed

Credit to the income tax bill

Eligible Property Type

Residential

Characteristics of Eligible Property

Only residential property is eligible for this program.

Eligibility Criteria

Age

Homeowner

Income Ceiling

Principal Residence

Property Value Limit

Renter

Other Criteria

Description of Eligibility Criteria

The applicant must be 65 years old by 31 December of the tax year, and must be a full or part-year resident of the state. The applicant must occupy property in Massachusetts as their primary residence. Applicants may not be dependents of other taxpayers. For homeowners, Massachusetts property tax payments together with half of the applicant's water and sewer expenses must exceed 10% of total income for the tax year. If the applicant is a renter, 25% of the applicant's rent must exceed 10% of their income. For tax year 2019 with benefit paid in 2020, the taxpayer's "total income" cannot exceed $60,000 for a single individual who is not the head of a household, $75,000 for a head of household, and $90,000 for married couples filing a joint return. The assessed value of the residence, before exemptions but after abatements, cannot exceed $808,000. No credit may be provided to individuals if the state or federal government is subsidizing the claimant’s rent through a rental assistance program. Applications for the Circuit Breaker Credit must be filed annually after filing a Massachusetts State Income Tax Return. The form (Schedule CB) must be completed within 3 years from the last day for filing the return.

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 state directly disburses benefits through a state refundable income tax credit.

Record ID

MA108_RR20

Footnotes

Maximum benefit and income levels are adjusted each year by the percentage increase in the Consumer Price Index (CPI) from 1999. Wealth limits are adjusted annually by the percentage change in the average assessed value of homes in the state since 2004. Real estate taxes include taxes levied on the taxpayer’s residence including any water and sewer debt charges. In communities not assessing water and sewer charges, 50% of water and sewer charges paid by the taxpayer is added to the amount of real estate taxes paid. Rent constituting real estate tax payments is calculated as 25% of total rent paid. The Circuit Breaker Credit does not prohibit the applicant from taking another exemption, deferral or abatement on their property taxes, however, any amount received from such an exemption or abatement, including the senior property tax work-off program, will be counted against the amount of taxes paid for purposes of determining eligibility and the amount of the credit.

Sources

Mass. Gen. Laws. ch 62, § 6(k) (in effect for 2020)
Massachusetts Department of Revenue Technical Information Release TIR 19-13: Annual Update of Real Estate Tax Credit for Certain Persons Age 65 and Older dated 10/08/2019 (for tax year 2019 benefit payable in 2020)
[https://www.mass.gov/technical-information-release/tir-19-13-annual-update-of-real-estate-tax-credit-for-certain-persons Accessed 09/25/2020]
View Archived Source


Massachusetts: Applying for the Circuit Breaker Credit [https://www.mass.gov/how-to/apply-for-the-circuit-breaker-credit Accessed 09/25/2020] View Archived Source

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