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The “Circuit Breaker” tax rebate is offered to senior citizens in Massachusetts to offset high property tax bills. This tax break is called the “circuit breaker”, because it is triggered like an electrical circuit breaker, when property taxes (and certain water and sewer bills) exceed 10% of a senior’s income. If you are age 65 or older, own or rent a home or apartment, and have annual income of $44,000 or less for one person, $55,000 or less for a head of household, or $66,000 or less for joint filers, you can apply for the circuit breaker tax rebate. Your property cannot be assessed at more than $441,000.
For renters, the law assumes that 25% of rent goes toward property tax. A formula can identify the amount of credit for which an elder tenant is eligible. Tenants should base the calculation on actual rent paid during the calendar year. No credit is allowed if one of the following applies. Taxpayer:
• claims married filing separate status; or
• receives a federal or state rent subsidy; or
• rents from a landlord who is not required to pay real estate taxes; or
• is the dependent of another taxpayer.
Even though the circuit breaker tax rebate is based on your property tax payment, it is the state that pays you back - not your local city or town. The circuit breaker is an income tax rebate for excessive property taxes paid. The circuit breaker began in 2001 and the State law allows you to back-file for three years’ tax benefits. For example, you have until April 15, 2005 to file for the circuit breaker tax rebate for 2002.
If you filed a Form 1, you must file a Form CA-6, which is an Application for Abatement/Amended Return. Along with the amendment form, you submit a Schedule CB to calculate your credit. If you have someone prepare your taxes, ask your preparer about the Circuit Breaker tax rebate. If you did not file any state income tax forms, because you did not owe any state taxes, you still can take advantage of this tax break. Just file a Form 1, plus the Schedule CB.
For more detailed information, go to www.mass.gov/dor or call 1-800-392-6089.
Elder Services’ Information and Referral (I&R) Department provides information about elder-related problems or issues. To contact them, call 1-800-544-5242.