HomeMy Public PortalAbout2016-10-25 Resolution adopting a higher maximim qualifying gross receipts amount for tax defferal applicants TOWN OF
1630 WATERTOWN
Office of the Town Manager
rf q 'i (Ss
Administration Building
149 Main Street
Watertown,MA 02472
Phone: 617-972-6465
Michael J.Driscoll tw w.watertown-ma.gov
totV❑111PT�lvafei[ONir-1nA.POV
Town Manager -
To: Honorable Town Council .
From: Michael J. Driscoll, Town Manager
Date: October 20, 2016
RE: Agenda Item—Resolution Adopting a Higher Maximum Qualifying Gross Receipts
Amount for Tax Deferral Applicants
Enclosed please find, for your consideration and review, email correspondence from Joseph A.
DiVito, Jr., Town Treasurer/Collector regarding a request to adopt a higher maximum qualifying
gross receipts amount for tax deferral applicants.
Therefore, I respectfully recommend and request your favorable consideration on the attached
Resolution at the November 9, 2016 Town Council meeting.
Mr. DiVito will be attending the November 9, 2016 Town Council meeting and available for any
further discussion on this matter.
Thank you for your consideration in this matter.
cc: Steven Magoon,Director of Community Development and Planning/Assistant Town Manager
Thomas J. Tracy, Town Auditor/Assistant Town Manager for Finance
Joseph A. DiVito,Jr., Town Treasurer/Collector
Francis J. Golden, Town Assessor
Anne-Marie Gagnon, Director of Senior Services
Mark R. Reich, Esquire, KP Law
Resolution # R-2016-
A Resolution Adopting a Higher Maximum Qualifying Gross Receipts Amount for Tax
Deferral Applicants
WHEREAS, the provisions of G.L. c. 59, §5 cl. 41A allow seniors 65 years of age or
older who meet certain income and other requirements to defer all or part of their
property taxes; and
WHEREAS, the provisions of G.L. c. 59, §5, cl. 41A(2)provide that the Town, by a vote
of its Town Council, may adopt a higher maximum qualifying gross receipts amount for
the purposes of such deferral,provided that such maximum qualifying gross receipts
amount shall not exceed the amount of income determined by the Commissioner of
Revenue for the purposes of G.L. c. 62, §6(k), for a single person'who is not a head of a
household.
NOW THEREFORE, BE IT RESOLVED that the Town Council of the City known as
the Town of Watertown hereby adopts a higher maximum qualifying gross receipts
amount for the purposes of such deferral in the amount of$57,000.
Council Member
I hereby certify that at a regular meeting of the Town Council for which a quorum was
present, the above Resolution was adopted by a vote of_ for, _ against and
present on November 9, 2016.
Marilyn W. Pronovost Mark S. Sideris
Clerk of the Council Council President
Driscoll, Michael
From: Divito,Joseph
Sent:Thursday, October 20, 2016 4:43 PM
To: Driscoll, Michael
Subject; FW: Tax Deferral Request
Mr. Driscoll,
As you are aware, all Cities and Towns in the Commonwealth offer a Tax Deferral to qualified property owners who are
65 years of age which allows them to defer a portion or all of their real estate taxes. Currently the "gross receipts"
maximum for Watertown property owners is$40,000.
Since my return to Watertown, I have met with several seniors who showed sincere interest in entering into the Tax
Deferral program to free up limited personal financial resources. They were not able to apply because they did not meet
the current"maximum gross receipt" requirement of$40,000. 1 believe Waterown's current maximum gross receipt
amount is in part the reason we only have four seniors taking advantage of this program.
The Tax Deferral law(MGL 41A,Sec 5, subsection 2) allows a community to increase the "maximum gross receipt"
amount for applicants up to the current amount allowed in Mass Gen Law Chapter 62 (Circuit Breaker Law),Section 6,
subsection k. That amount is currently$57,000 (see attachment).The communities of Arlington, Belmont, Boston,
Natick and Newton utilize the maximum gross receipt amount of$ 57,000.
Consequently and as a follow-up to our earlier conversations, I am requesting that the Town Council increase the
"maximum gross receipt" amount for Tax Deferral applicants to $57,000.
In conjunction with this proposed change, Mr. Golden, Chairman of the Board of Assessors,Anne-Marie Gagnon,
Director of Senior Services and I are planning to hold a workshop at the senior center to bring awareness of the Tax
Deferral program as well as other exemptions available to Watertown seniors. Also, additional outreach to seniors will
be ongoing.
Thank you for your consideration and please do not hesitate to contact me with any questions regarding this matter.
Joe DiVito,Jr.
Treasurer-Collector
t
Senior "Circuit Breaker" Tax Credit
What is It? No credit is allowed if ilia taxpayer claims the`married
Senior citizens in Massachusetts may be eligible to claim filing separate"status,receives a federal or state rent
a refundable credit on their stale income taxes for the real subsidy,rents from a lax-exempt entity,or is the depen-
estate taxes paid on ilia Massachusetts residential prop- dent of another taxpayer.
arty they own or rent and which they occupy as[heir prin-
clpal residence.The maximum credit allowed is$1,070 Is the tax credit considered Income?
for the tax year beginning January 1,2015.If the credit Tax credits received by eligible taxpayers are not con-
due the taxpayer exceeds the amount of the total In- sidered income for the purpose of obtaining eligibility
come tax payable for the year,the excess amount of the or benefits under other means-tested assistance pro-
credit will be refunded to the taxpayer without Interest. grams including food,medical,housing,energy and
Eligible taxpayers who own their properly may claim a educational assistance programs.
credit equal to[he amount by which their property tax How does a taxpayer claim the credit?
payments in the current tax year(excluding any oxemp- Taxpayers who are oligibie for the tax credit in the 2015
dons and/or abatements),Including water and sewer tax year can claim the credit by submitting a completed
debt charges,exceed 10%of their"total income"for the Schedule CB,Circuit Breaker Credit,with their 2015
same cu«enl tax year.Taxpayers residing 1n communi- slate income tax return,
Iles that do not include water and sewer debt service in
their property tax assessments may claim,in addition Note;Taxpayers who qualified for[he tax credit In a
to their properly tax payments,50%of the water and prior year but did not file Schedule CB online with their
sewer charges actually paid during the tax year when original slate income tax return should file an online
figuring their credit. Application for Abatement,available at vnvw.mass.gov/
dor/amend.Also,taxpayers who qualified for(lie tax
For renters,the law assumes that 25%of their rent goes credit in a prior year and did not file a tax return should
toward properly tax.Accordingly,renters may claim a file a state income tax return with Schedule CB. Either
credit in the amount by which 25%of their annual option must be completed within three years from
rental payment Is more than 10%of[heir total Income the last day for filing ilia return,without regard to
For purposes of the tax credit,a taxpayers"total in- any extension of time to file.
come"includes taxable Income as well as exempt in-
come such as social security,treasury bills and public What If the taxpayer is not required to file
pensions. a state Income tax return?
An eligible taxpayer who does not normally file estate
Who is eligible for the credit? income lax return may obtain a refund by filing a return
To be eligible for the credit for the 2015 tax year,a lax- with Schedule CB,Circuit Breaker Credit,
payer must be 65 years of age or older before January
1,2016(for joint liters,it is sufficient if one taxpayer is What documentation must the taxpayer keep? j
65 years of age or older),must own or rent residential As with all claimed lax credits and deductions,ilia tax-
property in Massachusetts and occupy the property as payer must keep all pertinent records,receipts and other
his or her principalM71,000
he taxpayer's total In- documentation supporting his or her claim for the credit.
come cannot exceer a single filer who is
not the head of aho for a head of Schedule CB and further information is avail-
household,or$85,000 for taxpayers filing jointly.No able at www.mass.gov/dor or by contacting
credit isallowed fora married taxpayer unless a joint the Massachusetts Department of Revenue's
oepaib Aoraeveoue return is filed,Moreover,the assessed valuation of the Customer Service Bureau at(617) 887.6367
Comm malNorMassa<WWS real estate cannot exceed$693,000, or toll-free in Massachusetts at800.392.6089.
(#)D
Afark R.Nunnellf•Coni isslonce ofRevome
DIVISION OF LOCAL SeRVICSS Seim H.Cronin
ntn De➢nmTtt&NT or RKVENVE Senior Deputy Conunissioner
TAXPAYER'S GUIDE TO LOCAL PROPERTY TAX DEFERRALS
SENIORS
Clause 41A
The Department of Revenue (DOR) has created this fact sheet to provide general information
about local property tax deferrals for seniors. It is not designed to address all questions or
issues and does not change any provision of the Massachusetts General Laws. To find out
about the specific eligibility and application requirements in your city or town, you must
contact your local board of assessors. The DOR cannot determine your eligibility or give you
legal advice. Property taxes are assessed and collected by cities and towns, not by the DOR.
Under state law, only your board of assessors, as the local tax administrator, can decide whether
you qualify for a deferral. If you disagree with its decision, you may appeal to the state Appellate
Tax Board (or county commissioners if your county's government has not been abolished).
INTRODUCTION
Cities and towns may give property tax exemptions to some individuals as defined by state law. An
exemption discharges the taxpayer from the legal obligation to pay all or a part of the tax assessed
for the fiscal year. Exemptions are found in various Clauses of Massachusetts General Laws
Chapter 59, Section 5 W,G.L. c. 59. &5),
Under Clause 41A, seniors may also be able to delay payment of their property taxes. A property
tax deferral does not discharge the tax obligation like an exemption. Instead, it defers payment
until the senior sells the property or passes away. A deferral allows seniors to use resources that i
would go to pay taxes to defray living expenses instead. Taxpayers who qualify for personal
exemptions under other clauses in M.G.L. c. 59, § 5 (for example, for seniors, disabled veterans,
blind persons or surviving spouses) may defer all or part of the balance of their reduced taxes.
If you qualify, you must enter into a written tax deferral and recovery agreement with the local
assessors. The assessors will record a statement at the Registry of Deeds to continue the lien that
exists on your property by law to secure payment of the deferred taxes. Joint owners,
remaindermen and mortgagees must give prior written approval.
APPLICATIONS You must file an application for each fiscal year with the
assessors in the city or town where your property is located. The
application is due on December 15, or three months after the
actual tax bills are mailed, whichever is later. Filing on time is
required. By law, the assessors may not waive this filing
deadline, nor act on a fate application, for any reason. Filing
an application does not entitle you to delay your tax payment.
For more information, please contact your local assessors,
Local Property Tax Deferrals for Seniors Rev. 7/2015
DOCUMENTATION You must provide the assessors with whatever information is
reasonably required to establish eligibility. This information may
Include, but is not limited to:
1. Birth certificates.
2. Evidence of ownership, domicile and occupancy.
3. Income-tax returns.
ELIGIBILITY You must satisfy tests relating to age, domicile, ownership,
REQUIREMENTS occupancy and annual Income. You must meet all eligibility
requirements as of July 1 of the tax year. (The fiscal year of
cities and towns begins July 1 and ends the following June 30.) If
you do not meet all requirements as of July 1, you cannot
defer all or any portion of your taxes for that tax year.
AGE You must be 65 or older.
DOMICILE You must have had a domicile in Massachusetts for at least 10
consecutive years before the tax year begins. You must also be
domiciled'in the property. Your domicile is where your principal
and legal home Is located, your family, social, civic and
economic life is centered and you plan to return whenever you
are away. You may have more than one residence, but only one
domicile.
OWNERSHIP AND You must have owned and occupied the property, or other real
, OCCUPANCY property in Massachusetts, as a domicile for at least 5 years,
The years do not have to be consecutive or at the same location.
1. You may own the property solely, as a joint owner or as a
tenant in common.
2. If you hold a life estate in the domicile, you are the owner.
3. If your domicile is held in a trust, you are the owner only if: !
a. You are a trustee or co-trustee of that trust, and i
b. You have a sufficient beneficial interest in the domicile.
INCOME LIMITS Your income (gross receipts) for the previous calendar year
I cannot exceed $20,000. If you are married, the combined gross
Irv` I�� receipts of you and your spouse cannot exceed $20,000. The
�V�r 000n' gross receipts limit may be increased up to the income limit
tAo) allowed for the "circuit breaker'state income tax credit for single i
non-head of household filers, by vote of the legislative body of
your city or town.
Gross receipts means Income from all sources and is
broader than taxable income for federal or state income tax f
purposes, Ordinary business expenses and losses are -
deducted but not personal or family expenses.
For more information, please contact your local assessors. 2
1
Local Property Tax Deferrals for Seniors Rev. 7/2015
DEFERRAL AMOUNT You may defer payment of all or a part of the taxes owed each
year so long as (1) you continue to qualify, and (2) the cumulative
deferred taxes and accrued Interest are not more than 50% of
your proportional ownership share of the fair cash value of the
property. For example, if you are a joint owner with one other
person, the total amount deferred cannot be more than 25% of the
property's value.
If you own the property with someone who is not your spouse, the
amount you may defer annually is also limited to your proportional
ownership share of the year's tax.
Interest on deferred taxes accrues at 8%, or a lower rate voted by
the legislative body of your city or town before July 1 of the tax
year.
SURVIVING SPOUSE Your surviving spouse who qualifies may continue to defer taxes
but must enter into a new deferral and recovery agreement.
Surviving spouses who inherit a property must have occupied it, or
other real property in Massachusetts, as a domicile for at least 5
years. Any additional taxes plus interest deferred by your surviving
spouse, plus the amounts previously deferred and unpaid, cannot
be more than 50% of the spouse's proportional ownership share of
the fair cash value of the property.
PAYMENT The payment of deferred taxes and accrued interest is due when
the property is sold or you pass away, unless your surviving
spouse continues to defer. As of that date, the Interest rate goes
up to 16%. If 6 months later, the deferred amount has not been
paid, the treasurer may petition the Land Court to foreclose the
lien on the property.
APPEALS
Appellate Tax Board The Appellate Tax Board (ATB) is an Independent, quasi-judicial
state board that hears taxpayer appeals from local assessors'
decisions on property tax abatements and exemptions. If county
government has not been abolished, appeals may be made to
the county commissioners instead, but assessors may and
usually do transfer those appeals to the ATB. ATB decisions may
be appealed to the Appeals Court and, ultimately, to the
Supreme Judicial Court.
You can obtain the ATB's ug ide to the property tax appeal
process from its website /www.mass.aov/atbl or by calling 617-
727-3100.
For more information, please contact your local assessors. 3
I
Local Property Tax Deferrals for Seniors Rev. 712015
Appeal of Action of You have three months from the date of the assessors'
Assessors decision on your deferral application to appeal to the ATB.
This includes decisions to deny a deferral or to grant a
deferral of a lesser benefit. If the application was deemed
denied, your appeal must be filed within three months of the
deemed denied date. As a general rule, if the real estate tax
on your domicile is over$3,000, you must also have paid each
actual tax installment on time for the ATB to hear your appeal.
' The assessors may grant the deferral or higher deferral in final
settlement of your application during the three month period for
filing an appeal, In that case, you do not have to have filed an
appeal with the ATB. However, If a settlement is not reached and
a deferral not granted during that period, you must have filed your
appeal by the deadline. If not, the ATB cannot hear the appeal.
ASSESSMENT AND DEFERRAL CALENDAR
January 1 Property Tax Assessment and Lien Date for Next Fiscal Year
July 1 Fiscal Year Begins I
Real Estate Deferral Eligibility Date for Fiscal Year
October - December Actual Tax Bills Mailed for Fiscal Year
November 1 (Semi- 15t Actual Tax Installment Payment Due
annual Payment
Communities)
February 1 (Quarterly
Payment Communities)
December 15, or 3 Deferral Applications to Assessors Due s
Calendar Months from
Mailing of Actual Tax
Bill if later
Contact your assessors. The due date depends on the payment system used in your community
and the date actual tax bills were malled for fiscal year.
2 Some assessors may accept applications before actual tax bills are mailed. If not, or your
application is not approved, you must apply by this deadline to claim the deferral.
For more information, please contact your local assessors. 4
Local Property Tax Deferrals for Seniors Rev. 7/2015
3 Calendar Months from Assessors Grant or Deny Deferral
Filing of Application (or Application Deemed Denied if Assessors Have Not Acted
Date of Written
Extension Given by
' Taxpayer)
3 Calendar Months from Appeal to ATB Due
Assessors' Action on
Application, or Deemed
Dental of Application
I
i
i
I
I
i
i
I
I
I
i-
I
For more information, please contact your local assessors. 5
I
I