The Massachusetts senior circuit breaker tax credit is a state benefit that allows eligible seniors who own or rent property to claim a refundable credit on their Massachusetts income tax. The state credit helps seniors whose property taxes exceed 10 percent of their total taxable income by reducing a qualifying senior’s state income tax. The local proposal put forward by Selectman Stu Sklar and associate Finance Committee member Jennifer Finch would require applicants to show they had qualified for the circuit breaker tax credit the prior year. In contrast to the state credit, however, Sklar and Finch’s proposal provides relief by capping the taxpayer’s property tax. Under the terms of the the Sklar-Finch proposal, a senior can qualify for both the state credit and the town property-tax cap.
So what does it take to qualify for the state circuit breaker?
To qualify:
- You must be a Massachusetts resident or part-year resident.
- You must be 65 or older by Dec. 31.
- You must file a Massachusetts personal income tax return.
- You must own or rent residential property in Massachusetts and occupy it as your primary residence
- For the 2017 tax year, your total Massachusetts income cannot exceed:
- $57,000 for a single individual who is not the head of a household.
- $72,000 for a head of household.
- $86,000 for married couples filing a joint return.
- If you are a homeowner, your Massachusetts property tax payments, together with half of your water and sewer expense, must exceed 10 percent of your total Massachusetts income for the tax year.
- If you are a renter, 25 percent of your annual Massachusetts rent must exceed 10 percent of your total Massachusetts income for the tax year.
You are not eligible if:
- You are a nonresident.
- You are married and your status is married filing separately.
- You are a dependent of another taxpayer.
- You receive a federal and/or state rent subsidy or you rent from a tax-exempt entity.
- For the tax year, the assessed value of your principal residence exceeds $747,000.
To prove eligibility, a senior must attach a completed Form CB to that year’s state income tax return. The maximum credit allowed for 2017 Massachusetts income taxes is $1,080.
The number of Harvard seniors filing for tax relief more than tripled between 2001 and 2014, the latest year for which numbers are available. In 2014, 72 Harvard seniors qualified for the state circuit breaker, receiving an average credit of $898.
