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October 15, 2009
FREE CASH FOR SENIORS
Each fall, the Massachusetts Department of Revenue issues it’s annual update for a program that I call “FREE CASH FOR SENIORS”. It is also known as the Senior Circuit Breaker Credit. This “Free Cash” started in 2001, at which time the maximum refund amount was $385. This year (2009) the maximum refund amount is $960.
This “Free Cash” is available to renters and homeowners over the age of 65. Generally, this credit is available to those who don’t make enough to file a tax return and, to a lesser extent, those who make enough to file but have total income of less than $77,000. Total income for this purpose includes items not taxable in Massachusetts, such as social security and other non-taxable items. For tax year 2009 the maximum refund available, regardless of whether you had any income tax withheld, is $960. For tax year 2008 the maximum refund was $930.
In order to get your “Free Cash”, you have to file a tax return. Many people have been told by their accountant that, “You don’t need to file anymore, you don’t make enough.” Generally, these are the people who, if they did file, would receive the maximum amount of Free Cash. Some people think that in order to get a refund, you need to have had some tax withheld. That is not true. You get this refund by filing a Massachusetts income tax return. 2001 was the first year that this credit was available. It’s too late to go back and file for 2001, but it’s not too late to file for 2006, 2007 and 2008. You could get more than $2,500 in refunds in total for those 3 years. Usually, if you are eligible for the credit in the current year, you were probably eligible in the prior years also. I’m sure that you, or someone that you know, has not filed income taxes because they thought they didn’t earn enough money. These people are entitled to this FREE MONEY.
If you were not planning on filing income taxes this year because you did not have enough income, and have changed your mind in order to claim the senior circuit breaker credit, call me. I will prepare your income tax return and electronically file it for free! I’ve provided this FREE service since 2001 and in recent years this FREE CASH FOR SENIORS program has netted over $45,000 in tax refunds per year for seniors across the state. For information on this free tax preparation service for those over 65 who are eligible for the senior circuit breaker credit, please call me at the Elder Law Center, (781)233-4444.
The following is a summary of some of the key rules about eligibility for the refund.
· The taxpayer or spouse, if married and filing jointly, must be 65 years of age or older on Dec. 31,
· Can either own or rent their home,
· Total income cannot exceed $51,000 for single, $77,000 for married filing jointly, and
· Assessed value of home cannot exceed $788,000
· Not eligible if you live at subsidized housing
If you think you are eligible and would like assistance in getting your refund, please call. When you call you should have the following information available:
1. Real estate tax or rent paid during the tax year.
2. Water/sewer expense paid by year.
3. Assessed value of house on January 1 of the tax year.
4. Total Income. For this purpose you have to include all of your income, even items that are normally not taxed in Massachusetts such as social security and Mass pensions. This amount is then reduced by $700 if single or $1,400 for a joint return where both are over age 65 and further reduced by certain other deductions.
Calculation of the credit is as follows: Eligible taxpayers who own their own property may claim a credit equal to the amount by which the total of their property tax payments in the current year combined with 50% of their water/sewer usage charges exceed 10% of their “total income”. For renters, we substitute 25% of your rent for property tax payments.
This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).
Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds Masters in accounting and a Masters in tax law. He currently serves on the board of directors of the Friends of the Saugus Senior Center and is a member of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions, please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org