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March 30, 2005


Unveils Creating Housing Options of Independence and Caring for Elders plan


Governor Mitt Romney today proposed a tax relief package for Massachusetts senior citizens that will help them live independent and fulfilling lives in their homes and communities.


“Our seniors should be able to live their remaining years in the comforting surroundings of their homes and communities,” said Romney. “We can help them by providing property tax relief and other tax breaks.”


Romney noted his plan does not violate Proposition 2½, unlike the bill passed by the Legislature last year. Romney vetoed that bill because it would have shifted the local tax burden from seniors to young families without a vote of the people.


Under Romney’s plan, known as the Creating Housing Options of Independence and Caring for Elders or C.H.O.I.C.E. program, more seniors will be eligible for a property tax deferral program that allows homeowners to defer paying their property taxes until their home is sold or transferred. The proposal reduces the interest rate charged by municipalities for the deferral from 8 to 3 percent and increases the income eligibility to participate in the program to as high as $60,000 if approved by local option.


Under current law, an individual must have lived in Massachusetts for at least 10 years and in their home for at least five years to participate in the deferral program. Romney’s proposal opens the tax relief to even more seniors by requiring them only to live in the same community for five years.


In anticipation of the program’s growth, cities and towns will no longer be required to finance the cost of deferrals. Instead, under the Governor’s plan, the state will provide loans to municipalities to be repaid when the property is eventually transferred or sold.


“The property tax deferral program is an underused option for our seniors who feel threatened by ever growing tax bills,” said Lieutenant Governor Kerry Healey. “We want to make more elders eligible and we want to make the benefit even more attractive to them.”


Romney’s C.H.O.I.C.E. proposal also provides additional tax breaks to help seniors stay in their homes longer, including:


  • A $2,000 deduction for the purchase of physician-prescribed durable medical equipment that is used for extended periods in a senior’s home to fulfill a medical need; and
  • A $10,000 exemption for individuals caring for a parent, in-law, sibling or grandparent over the age of 70.


Romney visited the home of 81-year-old Mattapan resident Ruth Colson to unveil his tax relief package. Colson, a retired Boston Public School teacher, praised the plan, saying, “I think what Governor Romney is doing for seniors is great. We need relief on our property taxes. I live on a fixed income, so anything the Governor can do is appreciated.”


“With property values climbing so fast in recent years, elders on a fixed income often need help to pay their property tax bills,” said Elder Affairs Secretary Jennifer Davis Carey. “Often these are people who have been paying their property taxes for 40 years or more.”


Romney and Healey also urged taxpayers to check their eligibility for the senior circuit tax credit program. More than 23,000 senior taxpayers, an increase of more than 20 percent over the same time last year, have claimed the credit on their personal income tax returns this year for a total savings of $14 million. The average credit: $622.


“Even if a senior has no other reason to file a personal income tax return, it is worth it to check the eligibility requirements for circuit breaker,” said Revenue Commissioner Alan LeBovidge. “It’s a refundable credit.”


By the end of the tax season, the Department of Revenue expects 50,000 seniors to share about $30 million in credits.


To claim the credit, a taxpayer must be 65 or older, independent and own or rent their principal residence in Massachusetts. The taxpayer’s total income cannot exceed $44,000 for a single filer, $55,000 for a head of household or $66,000 for joint filers. The assessed value of their property cannot be more than $441,000. The maximum credit allowed is $820.


The key to the credit is that the taxpayer’s property tax bill must exceed 10 percent of their total income. Renters can claim the credit if 25 percent of their rent exceeds 10 percent of their total income.


For more information about the senior circuit breaker tax credit, local property tax exemptions and other tax tips for seniors visit the Department of Revenue website at www.mass.gov/dor or call the DOR customer service bureau at 800-392-6089.



Tags: Taxes

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