Are You Eligible For the 65+ Circuit Breaker Tax Credit?

You may get a cash refund for your state income taxes.

The Massachusetts “Circuit Breaker” tax credit program is a program for adults age 65 + whose property taxes and half of the water and sewer bills are more than 10% of their annual gross income (or for renters, if their rent is greater than 25% of their income) and who meet a few other rules. Adults can get this income tax credit even if they owe no income taxes. Also, you can get this refundable tax credit if you also receive a property tax exemption from their town Assessor.

The value of the refundable credit can be as high as $1,070 for 2016 tax filers.

To obtain the credit, you must file a MA Income Tax “Form 1” and the “Schedule CB Form” for the 2016 tax year. You may file to get a refundable credit for the last 3 years* tax returns, if you have not yet done so. In addition to this year’s credit, the maximum credit you may receive for the past 3 tax years is: $1,070 in 2015; $1,050 in 2014; and $1,030 in 2013.

You must meet the following guidelines to qualify for this refundable tax credit:

  • Be 65 or older by the end of the tax year for which you are filing.
  • Have income below the maximum level: (including Social Security and other income not ordinarily taxed in Massachusetts)

     Income limits for the 65+ Circuit Breaker tax credit
    Income limits for the 65+ Circuit Breaker tax credit
  • The property that you own or rent must be residential property in Massachusetts that is your primary residence. (Renters of public housing or with subsidized rental agreements are not eligible.)
  • The assessed valuation of your home cannot be greater than $720,000 for tax year 2016. Maximum home values for prior tax years are: 2013 – $700,000; 2014 – $691,000; 2015 – $693,000. (There are no other assets limits for defining who may be eligible to get the tax credit.)
  • 10% rule for Owners: The credit will equal the amount your property tax bill (plus 50% of your water and sewer fees if not part of your property tax bill) exceeds 10% of your income, up to the maximum credit of $1,070 in 2016. If you also receive a local property tax exemption for seniors or earn a senior tax work off reduction that is okay. This credit will be applied to your reduced property tax bill amount.
  • 25% Rule for Renters: The credit will equal the amount by which 25% of your rental payments exceed 10% of your income, up to the maximum credit of $1,070 in 2016. The law assumes that 25% of rent goes toward property taxes.
  • Even if you don’t normally file with the state, if you meet the above criteria you are most likely due a “refund” check/tax credit from the Dept. of Revenue. If you have an accountant, ask him/her for help with this year and /or previous years.
  • The deadline for filing retroactive or amended tax returns (going back 3+ years) is April 15, 2017. For more information and to get the proper forms, call the Mass. Department of Revenue Customer Service at (617) 887-6367 for information and/or tax forms for this year and the past three years.For help filing a tax return or amended returns for prior years, call your local Council on Aging for information about where to meet with a volunteer tax aide. Or hire an accountant to file your state income taxes for all the years you may be eligible. To download the tax forms — Form 1 and the Schedule CB Form – go to the official Department of Revenue site .

SOURCE: Mass Association of Councils on Aging