Over 60 and wondering how you can lower your property tax bill? If you’ve got skills the town can use, one answer may be the senior tax work-off program. Residents over the age of 60 who’ve lived in Harvard for at least a year are eligible to work off up to $1,000 of their property tax bill for fiscal 2016. The program is administered by the Council on Aging (COA), and 13 residents have already applied for jobs this year. While only one abatement per property is allowed, there is currently no income eligibility requirement or limit on the number of applicants. The deadline for applications is Jan. 30.
From serving lunch to clearing trails
Current jobs include watering trees or clearing trails for the Conservation Commission, serving lunches at Hildreth House for the COA, monitoring after-school hours at the library, and various administrative jobs for other town boards and offices. The Community Cable Access Committee is always looking for more workers, and no experience is necessary—they will train. COA Director Debbie Thompson said that not only do these jobs provide people with tax breaks and an opportunity to do something useful for the town, but also she believes that “it’s a real benefit for people to see how hard our town employees work.”
An easy application process
The process is simple. Interested residents fill out an application (available on the COA website or at Hildreth House) listing their skills, interests, and time availability. When Thompson receives an application, she compares the applicant’s form with a list of jobs she’s received from department heads. If there are no matches, she contacts department heads to see if they can find something that will fit the applicant. Residents can also find their own jobs by speaking directly with a department head or school administrator. While being interviewed for this article, Thompson received a call from Library Director Mary Wilson about creating a handyman position at the library for someone who had spoken to Wilson about the job. “We find jobs for most people,” said Thompson. “The department heads are really wonderful to work with on this.” Departments provide any necessary training, such as the police department, where confidentiality training is required for all employees.
‘Wages’ taken off tax bill
Workers are paid $8.00 an hour this year, and they can work up to 125 hours between Jan. 1 and Nov. 30, 2015. Wages are not actually received. Instead, they are reported to the town tax collector, and the amount earned (minus deductions) is subtracted from the resident’s property tax bills for the third and fourth quarters of the fiscal year. Wages earned this year will not be applied to tax bills until early 2016.
According to Finance Director Lorraine Leonard, tax work-off seniors are considered municipal employees, and as such, a 7.5 percent deduction is taken from their wages for OBRA, the name used for the retirement program that Massachusetts state and municipal employees participate in as an alternative to Social Security. When employees “retire” from the senior work-off program, they can either move the money they contributed to OBRA to an IRA, or, if they are over 70 ½, they can receive the money as a distribution. Anyone who was retired as a municipal worker from Harvard or another town in the Worcester Regional Retirement System is not required to pay into OBRA from tax work-off wages. These wages are considered ordinary earned income by the federal government, and residents will receive a W2 form, but the wages are not considered taxable by the state. A 1.45 percent deduction is taken from wages for Medicare.
Taxes pay for program
The money to pay for the program comes from the town’s tax revenues. About $85,000 a year is put into an account called the Allowance for Abatements and Exemptions, also known as the Overlay account. The state requires that towns set aside money in this account to fund property tax abatements and exemptions, and the account appears as an expense in each fiscal year’s budget recap. Money for the tax work-off program comes from this account each year, and the amount reserved is rarely fully used. Last year, there were 11 participants in the work-off program, earning a total of about $6,500. While money in the Overlay account continues to grow if unused, money for the work-off program does not, and each year the Board of Selectmen decides on the amount to reserve. This year, $10,000 has been set aside for the tax work-off program.
Eligibility limits?
What if the program grows beyond the funding? Thompson said income eligibility requirements may have to be instituted, and even this year’s application mentions that as a possibility. She won’t know for sure until all of the applications have been received. “Many towns have income limits, and even limits on the number of participants,” said Thompson. Applications and program guidelines are available from the COA website at http://www.harvard.ma.us/Pages/HarvardMA_COA/srtax. For more information, contact Debbie Thompson at 978-456-4120.
