Circuit Breaker

This month’s issues of City and Town, a publication of the Department of Revenue has an excellent over-view of the state’s Circuit Breaker program. In 2001 Massachusetts enacted this program to provide tax relief to qualifying senior citizens. From 2001 to 2003 the number of seniors citizens filing claims under the Circuit Breaker increased significantly. This tax credit program was designed to assist low in-come elderly persons in paying property taxes. Homeowners and renters who qualify receive a “refundable credit on their state income taxes”. The maximum credit allowed in 2004 was $820. In order to qualify for the Circuit Breaker, a senior must be at least 65 years old and occupy the property as his/her primary residence. As explained in City and Town “income cannot exceed $44,000 for a single filer who is not the head of household, $55,000 for a head of household or $66,000 for taxpayers filing jointly. Moreover the assessed valuation of the real estate cannot exceed $441,000”. The amount of refund is calculated on the amount “by which the taxpayer’s property taxes, together with the eligible amount of that taxpayers water sewer charges, exceed 10% of the taxpayers income”. A senior who rents may also qualify for the circuit breaker tax credit. The law presumes that 25% of a person’s rent is for property taxes and water and sewer bills. According to City and Town “renters may claim the credit in the amount by which 25% of their annual rental payment is more than 10% of their total income”. Obviously, City and Town was the source of much of the information provide…at least the hard stuff.