Older West Virginians Stand to Benefit from Five Tax Programs

Do you want to bookmark ?

From personal income to property taxes, older homeowners can 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.”

Older West Virginians 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 Virginians 65 and older may also take advantage of the local property tax Homestead Exemption. Once approved for this exemption, homeowners 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.

Another program is available for older West Virginians 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 limit for a single person household is $15,315; for two people it 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 2009, people 65 and older can claim a new refundable tax credit called the Senior Citizen Property Tax Deferment Act. This credit allows older homeowners 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. They can also pay the property tax and ask for a refund. Gross household income must be $25,000 or less in order to qualify.

The credit 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.

Taxpayers may choose only one of the credits per household.

The Refundable Personal Income Tax Credit for Real Property Tax Paid can be claimed by any homeowner—regardless of age—when filing a 2008 state personal income tax form. A homeowner qualifies if he or she lives in the home and 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. Income from workers compensation, loss of earnings insurance, nontaxable social security benefits, interest, and dividends, etc. counts toward the homeowner’s total income.