The West Virginia Legislative action over the past three years has improved Senior Citizens tax saving opportunities for years to come. From personal income to property taxes, Seniors have the ability to decrease their tax liability and put that savings to use at home.
“We are pleased to inform AARP members, and all West Virginia Seniors, of the new changes in the state tax laws in which they stand to benefit,” said West Virginia State Tax Commissioner Christopher G. Morris. “We believe the programs available will help Seniors.”
Seniors may take advantage of the Personal Income Tax Modification Decrease. Any person, who turns 65 years old or older on or before the last day of the taxable year, may subtract $8,000 from the federal adjusted gross income for their West Virginia Personal Income Tax.
West Virginia Seniors may also take advantage of the local property tax Homestead Exemption. Once approved for this exemption, Seniors are automatically eligible to see if other benefits described below apply to them.
“The local property tax Homestead Exemption provides Seniors with a $20,000 exemption against the total assessed value of their home,” Morris said. Additional qualifications require the homeowner to be 65 years old or older by July 1 of the tax year, have paid taxes on a homestead for two consecutive tax years and live in the owner occupied residence in which the exemption would apply.
A program initially established by the 2001 Legislature and expanded in 2006 is available for Seniors to claim on the state level when they file their personal income taxes. Homeowners can qualify for the Senior Citizen Income Tax Credit for Property Tax Paid once they meet the standards for the local Homestead Exemption and have a federal adjusted gross income of 150% or less of the poverty guideline. For tax year 2007, the U.S. Department of Health and Human Services set the 150% of the federal poverty level for a single person household at $15,315. For a two person household the income amount is $20,535.
“Under this tax credit, low-income individuals are allowed a refundable Personal Income Tax Credit equal to the property tax paid on the first $20,000 of the taxable assessed value of their home,” Morris explained, “This comes after the Homestead Exemption.”
For the 2009 tax year, those people over the age of 65 can claim a new refundable tax credit called Senior Citizen Property Tax Deferment Act. This credit allows Seniors the option of deferring payment on any residential property tax increase in excess of $300. This deferment comes to an end when they either sell their home or when their estate is settled. The other option is that a Senior can pay the property tax and ask for a refund.
“There are some additional qualifications,” Commissioner Morris said, “For example, Mr. and Mrs. Smith’s gross household income is $25,000 a year. Now their property taxes increased by $350 dollars this year. They would qualify for this refundable credit.” A Senior’s gross household income must be $25,000 or less in order to qualify.
The credit the homeowner will receive is equal to the difference between the base year tax paid prior to the increase and the tax paid during the tax year. “Let’s say Mr. and Mrs. Smith’s previous year’s property tax was $1,000, but this year it increased to $1,350. If they choose to seek the refundable credit, they’ll get back $350,” Morris said.
It is important to note that Seniors must choose between:
- The Senior Citizen Property Tax Deferment Act
- The Senior Citizen Income Tax Credit for Property Tax Paid
- The Refundable Personal Income Tax Credit for Real Property Tax Paid
The law mandates, Seniors can choose only one of the aforementioned credits per household.
The Refundable Personal Income Tax Credit for Real Property Tax Paid can be claimed by any homeowner when filing a 2008 state personal income tax form. A homeowner qualifies, if he or she pays property taxes that are in excess of 4% of their income. They can get that money back, up to $1,000, in the form of a refund. “There is no minimum age requirement in order to qualify for this refund,” Morris said, “However, the owner of the home must live there.” Income from workers compensation, loss of earnings insurance, nontaxable social security benefits, interest, and dividends, etc. counts toward the homeowner’s total income.
“The State Tax Department is pleased with actions taken by lawmakers in an effort to relieve our treasured Senior Citizens of tax burdens,” Morris said.
While two of these refundable credits will not be accessible until future calendar years, Commissioner Morris suggests all Taxpayers familiarize themselves with the laws so that each may take advantage of the opportunities once available.
Gaylene Miller being Interviewed
