Massachusetts Senior Circuit Breaker Tax Credit

If you are age 65+, and have paid rent or real estate taxes in 2007, you may be eligible for the Massachusetts Circuit Breaker Tax Credit. This tax credit is for seniors whose real estate tax payments are greater than 10% of their income.

Eligibility Requirements
* you or your spouse must be age 65 or older by the end of the tax year
* if married, you must file jointly
* you cannot be the dependent of another taxpayer
* you must rent or own a home in Massachusetts that is your principal residence
* if you are a homeowner, your property's assessed value cannot be greater than $772,000 on January 1, 2007.
* if you are a renter, you cannot be getting a federal or state rent subsidiy (such as Section 8), and your landlord must pay property taxes
* you must meet the income limits
* the amount you paid for real estate taxes must be greater than 10% of your total income

Income Limits
Your total income, in 2007, cannot be greater than
* $48,000 single
* $60,000 head of household
* $72,000 married filing jointly

Total income includes social security, retirement, pensions and annuities, cash public assistance, and tax-exempt interest and dividends.

Calculating Real Estate Tax Payments
* Homeowners should include all real estate tax payments (minus any abatements or exemptions) actually paid during the tax year.
* Homeowners may also add 50% of the water and sewer charges paid during the year (unless they live in a community that includes water and sewer debt charges in the real estate taxes).
* Renters should count 25% of the rent payments they actually paid during the tax year as real estate tax payments.

The maximum tax credit you can get is $900 for tax year 2007. The actual credit you will get depends on your income and your real estate tax payments.

If you did not claim the circuit breaker tax credit in previous years, you can go back three years and claim the credit now.

You must file a Massachusets state income tax return to claim the Circuit Breaker Credit, whether or not you normally file a state tax return. You must include Schedule CB, Circuit Breaker Credit, with Form 1. This year you must also include proof of health insurance (Medicare) coverage (Schedule HC).

One of my clients, for whom I had not provides services in the past, received $3400 in refunds by filing for the Circuit Breaker Tax Credit for the current and past three years!