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

State

Iowa

Year

2022

Variations in Receipt of Benefit

Benefit Varies with Income

Benefit Type

Circuit Breaker

Benefit

The benefit is a credit of a percentage of property taxes or rent constituting property taxes paid, the amount of which is based on 6 income brackets. The benefit amount ranges from 100% of property taxes paid for the lowest income level to 25% of property taxes paid for the highest. For those who are 70 years old or older, the benefit is the greater of either the amount that they would have received if they were between the ages of 65 and 69 or the increase in their property tax liability compared to the first year that they qualified for the benefit. The maximum benefit may not 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. For renters, property taxes are calculated as 23% of gross rent paid by the claimant or the claimant's household.

How is Benefit Disbursed

Credit to the property tax bill

Eligible Property Type

Residential

Characteristics of Eligible Property

Only homesteads are eligible. “Homestead” refers to the dwelling, owned or rented, that is used as a home by the claimant, including 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 multi-purpose building and a part of the land upon which it is built. It does not include personal property, except a manufactured or mobile home may qualify as a homestead.

Eligibility Criteria

Age

Disability

Homeowner

Income Ceiling

Renter

Description of Eligibility Criteria

Applicants must be at least 65 years of age or 100% disabled. For applicants between the ages of 65 and 69, income brackets are specified by statute and income may not exceed $24,206 for application in 2022. Applicants 70 years old or older must have income below 250% of the federal poverty level. 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.

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 credit for property taxes due 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 in 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 credit 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_RR22

Footnotes

Effective 1 July 2021, Those who are 70 years old or older may qualify if their income is less than 250% of the federal poverty level. Applicants age 70 or older also qualify for an alternative benefit equal to the difference between their current year taxable liability and their taxable liability in the first year that they applied. This change is pursuant to 2021 Iowa Acts ch. 177 § 125 (SF619). 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. Applicants must return a completed application to their county treasurer on or before 1 June or, if the treasurer has extended the filing deadline, on or before 30 September. The Director of Revenue may extend the filing deadline through 31 December for good cause.

Sources

Iowa Code § 25B.7;
Iowa Code § 422.4;
Iowa Code § 425.16 ~ § 425.40 (in effect for 2022)
Iowa Department of Revenue, 2022 Property Tax Credit Claim, Form 54-001a
[https://web.archive.org/web/20220124113950/https://tax.iowa.gov/sites/default/files/2022-01/IowaPropertyTaxCreditClaim(54001).pdf Accessed 11/22/2023]
View Archived Source
Iowa Department of Revenue, Property Tax Credits and Exemptions
[https://tax.iowa.gov/property-tax-credits-and-exemptions#Disabled Accessed 11/22/2023]
View Archived Source
2021 Iowa Acts ch. 177 § 125 (SF619)

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