[Adopted 3-19-2012; amended in its entirety 3-30-2021]
The Town of Easton amends and restates the ordinance relating
to tax relief for elderly homeowners, adopted pursuant to § 12-129n
of the Connecticut General Statutes for eligible residents of the
Town of Easton, on the terms and conditions provided herein. This
ordinance is enacted for the purpose of assisting elderly homeowners
with a portion of the costs of property (real estate) taxation. Tax
relief is provided based upon an assessment of the taxpayer's
ability to pay taxes.
No later than August 15 of every third year commencing 2023,
or more frequently at the discretion of the Board of Selectmen, the
Board of Selectmen shall appoint a committee of not fewer than five
resident taxpayers of the Town of Easton which shall undertake and
complete within 180 days following such appointment, or such longer
time as the Board of Selectmen shall authorize, a study and investigation
with respect to property tax relief for the elderly and, on the basis
thereof, prepare a report to the Board of Finance which report shall
include the following:
A.
With respect to the previous three years, the fiscal effect of such
property tax relief on property tax revenues for such years for the
Town of Easton; and
B.
Recommendations with respect to the form and extent of such property
tax relief for the following three years, including estimates of the
effect annually of recommended tax relief on property tax revenues.
After receiving the report from the Committee on Tax Relief
for the Elderly, the Board of Finance shall provide such comments
on the recommendations, as it deems appropriate. The Committee on
Tax Relief for the Elderly shall consider the comments of the Board
of Finance and shall, to the extent deemed necessary and appropriate
by such Committee, present revised recommendations to the Board of
Finance. When the Board of Finance is satisfied with the recommendations
of the Committee, the Board of Finance shall recommend the plan for
adoption by the Town at a Town Meeting to be scheduled by the Board
of Selectmen. The Town Meeting shall, by majority vote, approve or
reject the recommended plan, but shall not amend the plan. If approved,
the plan shall remain in effect until such time as a new recommended
plan is approved by the Town Meeting. If rejected, a new Committee
on Tax Relief for the Elderly, that may, but need not, contain members
of the preceding Committee on Tax Relief for the Elderly, shall be
convened. Until such time as a new plan for tax relief for the elderly
shall be adopted by the Town Meeting, the then current plan shall
remain in effect.
This ordinance may, but need not be, amended and restated in
its entirety in the future. It shall be sufficient to submit as an
amendment to the ordinance the provisions of the recommended or approved
plan.
Under no circumstances shall tax relief provided under this
ordinance result in a benefit to the estate of a deceased taxpayer
and to the eligible surviving spouse that would be separately, or
together, greater than the deceased taxpayer would have received if
such deceased taxpayer had lived.
If any person entitled to the tax relief pursuant to this ordinance
transfers the property on which relief is granted, such tax relief
shall be prorated as of the date of transfer of title and the transferee
of such property shall pay the Town a prorated share of the tax relief
as provided by § 12-81a of the Connecticut General Statutes.
Tax relief under this ordinance shall be allowed only once per
year for each eligible principal residence. In any case where title
to such real property is recorded in the name of an eligible applicant
(including such applicant's spouse) and any other person or persons,
the tax relief shall be prorated so as to allow tax relief equivalent
to the fractional share of ownership in the property of such eligible
applicant (including such applicant's spouse). In any case where
such real property is a multiple-family dwelling and is occupied by
the eligible applicant (including such applicant's spouse) and
any other person, the tax relief shall be prorated so as to allow
tax relief equivalent to the fractional portion occupied by such eligible
applicant (including such applicant's spouse). The Assessor shall
determine the proration amount in a multiple-family situation.
The total of all tax relief granted under this ordinance shall
not exceed an amount equal to 4% of the total real estate property
tax assessed for the Town in the preceding tax year, and if such relief
would exceed such amount, it shall be prorated to keep the total amount
of Town tax relief within such 4%.
The Town of Easton shall not place a lien on any property for
which tax abatement is granted under this ordinance in any amount
by reason of the granting of such abatement. However, the terms of
this section will not in any way affect the right of the Town of Easton
to have a lien on such property pursuant to any tax deferral granted
under this ordinance or pursuant to any section of the Connecticut
General Statutes other than § 12-129n. Nothing herein shall
limit the right of the Town to place a lien on any property for delinquent
taxes.
This ordinance shall apply to real property taxes as are due
and payable commencing the fiscal year beginning July 1, 2021, and
succeeding fiscal years.
A.
Each year, subsequent to May 31, the Tax Relief for the Elderly Committee
will prepare a report, to be delivered to the Selectmen and Board
of Finance, which summarizes the Senior Tax Relief results for the
current year and compares these with results from the three prior
years. The report, as a minimum, will contain the following information:
(1)
Total amount of tax relief granted.
(2)
The number of seniors that qualified for relief.
(3)
The number of seniors who received tax relief last year but not this
year.
(4)
The number of new tax relief recipients this year.
(5)
The number of recipients who have been granted an extension for completing
their tax relief application.
(6)
The number of recipients that have been granted tax deferrals.
B.
The report will, in addition, include the recommendation of the committee
for the amount to be budgeted for senior tax relief for the next year.
A.
Any person who owns real property in the Town of Easton or is liable,
by reason of life use, for payment of taxes thereon pursuant to § 12-48
of the Connecticut General Statutes, and who occupies the property
as a principal residence, shall be entitled on the annual taxes for
such property as are due and payable for the fiscal year beginning
July 1, 2021, to a credit against the real property taxes on such
residence, based on the plan set forth in this ordinance.
B.
This program shall be offered to those persons qualifying even though
their current taxes may be in arrears, provided that all of the following
conditions are met:
(1)
Such person was 65 years of age or over on December 31 prior to the
fiscal year for which tax relief is sought, or his or her spouse was
65 years of age or over on such December 31 and resides with such
person, or such spouse was on such December 31, 60 years of age or
over and the surviving spouse of a taxpayer who was qualified for
and awarded tax relief under this ordinance at the time of his or
her death.
(2)
Such person, or such person's spouse, as described in Subsection B(1), shall have resided in the Town of Easton for a period of five years immediately prior to the fiscal year for which tax relief is sought.
(3)
The property for which the tax relief is sought must be the principal
residence of such person, and such person's spouse (if any),
for the calendar year immediately prior to the fiscal year for which
tax relief is sought. "Principal residence" shall be defined as the
residence of a person for at least 183 days in a calendar year. The
property must remain the principal residence of the applicant in any
year in which they receive tax relief. However, should the applicant
be confined to a skilled nursing home for 365 days or less but intend
to return to the property, such person is not disqualified from applying
for tax relief.
(4)
Such person or such person's spouse as defined in Subsection B(1) shall file with the Assessor an application, in a form acceptable to the Assessor, not later than May 15 of the year following the October 1 grand list. The form shall require such information as the Assessor may reasonably require and shall be prepared by the Assessor subject to the approval of the Board of Selectmen.
(5)
Assets limitation. In order to qualify, each household must certify that it has a qualifying total asset value (QTAV) not exceeding $650,000. Qualifying total asset value shall consist of any and all assets of the applicant and spouse (and all other adults living in the household except those excluded in § 430-22) as of December 31 (last) including without limitation liquid assets (e.g.; cash, including bank accounts, and marketable securities), retirement accounts (e.g.; IRA, 401k, 403b) and the taxpayer's equity in all other real estate and personal property but shall specifically exclude the value of the applicant's principal residence (as defined in this section), all tangible personal property contained therein and all motor vehicles. The Assessor shall include the affidavit shown in Appendix A[1] of this ordinance in each application form for tax relief.
[1]
Editor's Note: Appendix A is included as an attachment
to this Chapter.
(6)
If in the Assessor's opinion the taxpayer does not qualify for tax relief, she/he may refuse relief. In the event of a question with respect to income or a claimed exemption of income, or deduction from income, not specifically referred to in § 430-22, the Assessor or designee shall make a determination based upon the purposes of this ordinance. The Assessor may also refuse tax relief if there is a question as to whether or not any application is bona fide. Any person refused relief for any reason may appeal to the Board of Selectmen, which may only grant tax relief if in its opinion the Assessor has erred, or where the ordinance is not clear, or in case of extreme hardship or extraordinary circumstances. The Selectmen shall, prior to making a decision, consult with the Tax Relief Committee or its chairman, who may convene the committee for a recommendation. No appeal or other court action shall be brought by any applicant for tax relief more than one year after July 1 of the year in which the tax abatement takes place or would have taken place if granted.
The Assessor or his or her designee shall determine the income of each applying taxpayer, as defined in § 430-22 below. The Assessor or designee shall compile a list of all applying taxpayers who qualify for tax relief. The Assessor or designee shall compute the amount of such relief.
Each applicant shall sign an affidavit certifying that the information
provided with respect to such applicants' total income in the
home is true and accurate to the best of the applicant's knowledge
and other information as requested on the application form is true.
"Qualifying Household Income" (QHI) shall include the income
of the taxpayer, taxpayer's spouse, and all other adults who
reside in the household unless such other resident is a full-time
student, a person receiving Social Security disability income, or
a "renter." A "renter" is a resident of the household who 1) is not
related to the applicant 2) pays "fair market rent" and 3) the rental
income is included in the applicant's 1040 tax return. Documentation
required to determine all residents' income and residence status
includes their federal and state income tax returns for the prior
tax year, documentation of health care and health care insurance premium
expenses and any other documentation as may be reasonably required
in the opinion of the Assessor. Anyone who is applying for tax relief
and is not required by the IRS to file a tax return, must provide
equivalent income information as determined by the Assessor.
If any of the residents do not have the prior year tax returns required by § 430-22 due to having an extension on filing such returns a tax relief extension process will be used as follows:
A.
The application for tax relief must be submitted as normal by May
15 with all required signatures.
B.
No tax credit will be calculated, and no credit will be applied to
the applicant's July tax bill.
C.
When the required return(s) are finally filed, a copy shall be submitted
to the Assessor's office.
D.
The applicant's tax relief amount, if any, will then be calculated
and applied to their January tax bill. The amount will include tax
relief for the full year.
E.
If the applicant does not provide the required tax return(s) by November
15, no tax relief will be granted for that year.
A.
In determining total income in the household, there shall be no allowance
for:
(1)
Business losses from Schedule C or Schedule C-EZ, IRS Form 1040 Schedule
1 line 3.
(2)
Capital losses, IRS Form 1040 line 7.
(3)
Other losses from form 4797, IRS Form 1040 Schedule 1 line 4.
(4)
Losses from Schedule E including losses emanating from rental real
estate, royalties, partnerships, S-corporations, trusts, etc., IRS
Form 1040 Schedule 1 line 5.
(5)
Other losses, IRS Form 1040 Schedule 1 line 8.
(6)
With the exception of Farm Losses on IRS Form 1040 Schedule 1 Line
6, which shall be allowed.
B.
The reference to current IRS forms shall include comparable data
as contained in any revised IRS forms.
If Qualifying Household Income is over the amount shown in Table
1 for "Maximum Income" the taxpayer shall not be entitled to a tax
credit.
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Table 1 - Income Limits and Abatement Calculation Values
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|---|---|---|---|
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IRS Tax Year
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Town Fiscal Year
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Maximum Income
|
Maximum Tax Credit
|
|
2020
|
2021-2022
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$85,000
|
46.0%
|
|
2021
|
2022-2023
|
$85,000
|
46.0%
|
|
2022
|
2023-2024
|
$85,000
|
46.0%
|
Income of each resident shall be calculated as follows:
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No.
|
Income Item
|
Definition
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|---|---|---|
|
1
|
IRS adjusted gross income
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AGI as shown on Line 11 of IRS Form 1040
|
|
2
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Add: Tax-exempt interest
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IRS Form 1040 line 2a
|
|
3
|
Add: The portion of IRA Distributions exempt from taxation.
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IRS Form 1040 line 4a minus 4b (If 4a is blank, skip this step.
|
|
4
|
Add: The portion of pension and annuity distributions exempt
from taxation.
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IRS Form 1040 line 5a minus 5b (If 5a is blank, skip this step.
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|
5
|
Add: The portion of Social Security benefits exempt from taxation.
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IRS Form 1040 line 6a minus 6b (If 6a is blank, skip this step.
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|
6
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Add: Other nontaxable income, if any.
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Any other income or funds received and not reported as taxable
income on the 1040.
|
|
7
|
Add back: Business losses from Schedule C or Schedule C-EZ
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IRS Form 1040 Schedule 1 line 3
|
|
8
|
Add back: Capital losses,
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IRS Form 1040 line 7
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|
9
|
Add back: Other losses from form 4797
|
IRS Form 1040 Schedule 1 line 4
|
|
10
|
Add back: Losses from Schedule E including losses emanating
from rental real estate, royalties, partnerships, S-corporations,
trusts, etc.
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IRS Form 1040 Schedule 1 line 5
|
|
11
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Add back: Other losses
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IRS Form 1040 Schedule 1 line 8
|
|
12
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INCOME SUBTOTAL
|
Sum of amounts in lines 1 thru 11 above.
|
|
13
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Less: 1/2 of all out of pocket health insurance premiums
|
Medicare Parts B,D, Medicare supplement insurance, Medicare
Advantage Plan, other private health care insurance and long term
health care insurance
|
|
14
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Less: Other medical expenses
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Typically, the amount from IRS Form 1040 Schedule A, Line 1
(less the amount in Line 13 above) in excess of 20% of the Income
Subtotal (Line 12).
|
|
15
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Self-employed health insurance deduction
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IRS Form 1040 Schedule 1 Line 16
|
|
16
|
MEDICAL EXPENSES DEDUCTION
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Line 13 + Line 14 - Line 15
|
|
17
|
QUALIFYING HOUSEHOLD INCOME
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Income subtotal - Medical Expenses Deduction
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The tax abatement provided under the terms of this ordinance
is in the form of a credit applied to the annual real estate tax bill
levied on the applicant's residence. This credit does not ever
have to be paid back to the Town. The credit is only good for that
one year for which the applicant is applying, and if they wish an
abatement in future years they must apply for same unless the Assessor
notifies otherwise. Subject to all other limitations contained in
this ordinance, the amount of this tax credit shall be based upon
the qualifying household income of an eligible applicant as follows:
A.
The tax credit amount is calculated as a percentage of the prior
year's taxes due before any state or Town relief.
B.
The tax credit percentage shall be a maximum percentage (as shown
in Table 1) at zero income on a straight declining line to 0% at the
maximum income limit from Table 1.
C.
The tax credit will be rounded to the nearest dollar.
D.
In no case shall the tax credit exceed the maximum tax credit percentage
of the taxes due from Table 1 times the percentage of ownership.
E.
The tax abatement provided under this ordinance to a resident or
residents shall, in no event, together with any relief received by
such resident or residents under the provisions of §§ 12-129b
to 12-129d, inclusive, of the General Statutes, exceed in the aggregate
75% of the tax which would, except for §§ 12-129b to
12-129d, inclusive, and this ordinance, be laid against such resident
or residents. Where the aggregate relief provided exceeds 75%, such
resident or residents will receive only that portion of such tax relief
equal to 75% of the tax due.
Tax abatement shall be calculated as follows:
B.
Tax abatement formula. Tax Abatement = Maximum Tax Credit x Ownership
Taxes Due x Income Multiplier.
(1)
Maximum Tax Credit is: from Table 1.
(2)
Property Taxes Due are: Assessed Value x Mil Rate.
(3)
Ownership Taxes Due are: Percentage Ownership x Property Tax
Due.
(4)
Income Multiplier is: [Maximum Income - QHI]/Maximum Income.
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Example 1:
| |
|
Maximum credit
|
= 46%
|
|
Ownership
|
= 100%
|
|
Last year's property taxes due
|
= $8,000
|
|
Last year's income
|
= $45,000
|
|
Income multiplier
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= [85,000-45,000]/85,000 = 0.47
|
|
Tax Abatement
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= 0.46 x 1.0 x 8,000 x 0.47 = $1,730
|
|
Assume this year's taxes due
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= $8,200
|
|
Taxes due after abatement
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= $8,200 - $1,730 = $6,470
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|
Example 2:
| |
|
Maximum credit
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= 46%
|
|
Ownership
|
= 50%
|
|
Last year's property taxes due
|
= $8,000
|
|
Last year's income
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= $50,000
|
|
Income multiplier
|
= [85,000-50,000]/85,000 = 0.41
|
|
Tax abatement
|
= 0.46 x 0.5 x 8,000 x 0.41 = $754
|
|
Assume this year's taxes due
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= $8,200
|
|
Taxes due on 50% ownership
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= $4,100 (Co-owner pays the other $4,100)
|
|
Taxes due after abatement
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= $4,100 - $754 = $3,346
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Tax relief provided under the terms of this ordinance offers
the applicant an option to defer the payment of a portion of the annual
real estate tax bill as follows:
A.
After qualifying for a tax abatement, an optional tax deferral shall
be allowed.
B.
The taxpayer may defer up to 75% of taxpayer's remaining tax
bill after all other tax relief benefits have been applied.
C.
The total deferral pool for each year shall be $80,000 plus the excess
deferral amount over $80,000 of the last taxpayer to qualify.
D.
Deferrals will be allocated by income, lowest income first, until
all of the deferral pool is allocated.
E.
Deferral shall apply separately to each year's tax bill (i.e., 2021/2022 taxes of a taxpayer who is awarded deferral for 2021/2022 fiscal year shall continue to be deferred in all subsequent years, without further qualification, until termination as per Subsection I below).
F.
For the next year's (f/y 2022/2023) taxes and every subsequent year the taxpayer must apply and qualify again for deferral and must also fit within the $80,000 allocation as per Subsection C above.
H.
Lien.
(1)
The Tax Collector shall make a list of the deferrals granted
for the coming tax year, and shall, as soon as allowed by state statute,
file a tax lien on the land records for each deferral granted;
(2)
The lien shall be filed using a form to be prepared by the Tax
Collector. The form shall, inter alia, state the rate of interest
applicable for the duration of the lien;
(3)
Interest will be calculated and applied to the lien according
to the Tax Collector's standard practices;
(5)
Pursuant to § 12-129n of the Connecticut General Statutes,
any such lien shall have a priority in the settlement of the property
owner's estate.
I.
Termination.
(1)
The tax deferral shall terminate, and all accrued interest shall
become due and payable, along with the total amount of deferred taxes,
upon the taxpayer's sale or transfer of the property, or when
the taxpayer no longer resides in the residence on the property, or
taxpayer's death, whichever comes first, except that if the title
passes by deed or by operation of law (will, intestacy or survivorship)
to a qualified spouse, the tax deferral shall continue.
(2)
If, as a result of unpaid taxes due (other than deferred taxes)
or any other delinquent municipal encumbrances or assessments, the
property becomes subject to foreclosure or tax sale by the Town, all
outstanding tax deferrals shall terminate, and all deferred taxes
and accrued interest shall become due and payable.
J.
Foreclosure/tax sale. Thirty days after termination (but six months
in the case of death) the interest rate on all deferred taxes shall
resume at the then current tax year's interest rate plus 4%,
and the Town may thereafter bring foreclosure or tax sale proceedings
on all of the unpaid deferral tax liens.
K.
Individual deferral limits. For any taxpayer, the total of all tax
deferrals (with interest either calculated or approximated at 4% per
annum) may not exceed the assessed value of the taxpayer's home,
less the then current mortgage (or home equity loan) balances and
less any overdue and unpaid Town taxes (with statutory 18% interest
on overdue and unpaid town taxes).
L.
Prepayment. Deferred taxes may be repaid at any time. A partial prepayment
will be applied first to prepayment of interest on the oldest tax
lien, then to principal on the oldest tax lien.
M.
Procedure to be followed when an applicant requests a deferral while
also having an extension to file federal taxes:
(1)
When filing for an extension no tax credit will be applied on
the July tax payment. The deferral will be for 75% of the July tax
bill after any state tax credit.
(2)
After the required income information is submitted to the Assessor
the entire year of tax credit will be calculated and deducted from
the January tax bill. The amount of deferral allowed will be the amount
that makes the total year's deferral equal to 75% of the tax
remaining after all credits.
(3)
If, after receiving a tax deferral on the July tax bill, the
applicant does not submit the required income information by the time
limit called for in § 430-23E or submits income information
that has them not qualifying for tax relief, the amount of the tax
deferral given on the July tax bill will be considered past due taxes
and will incur interest at 18% per year.
The tax deferral benefit shall be calculated as follows:
A.
Basis. Tax deferral is based on the following:
(1)
Calculation of abatement amount is done prior to deferral calculation.
(2)
Calculation of state circuit breaker amount is also done prior
to deferral calculation.
(3)
Amount of taxes allowed to be deferred is 75% of the remaining
tax bill after all other tax relief has been taken.
(4)
Interest on the deferred taxes is equal to the Town borrowing
rate.
B.
Tax deferral formula.
(1)
Tax Deferral = (taxes due - tax relief) x 0.75.
(2)
Tax Relief = (tax abatement amount) + (circuit breaker amount).
|
Example:
| |
|
Last year's property taxes due
|
= $8,000
|
|
Ownership
|
= 100%
|
|
Last year's income
|
= $35,000
|
|
Income multiplier
|
= [85,000-35,000]/85,000 = 0.59
|
|
Tax abatement
|
= 0.46 x 1.0 x 8,000 x 0.59 = $2,171
|
|
Circuit breaker
|
= $750
|
|
This year's taxes due
|
= $8,200
|
|
Taxes due after all relief
|
= $8,200 - $2,171 - $750 = $5,279
|
|
Tax deferral allowed
|
= $5,279 X 0.75 = $3,959
|
In accordance with the State of Connecticut Municipal Records
Retention Schedule for Assessment and Tax Collection (M4), Tax Relief
for the Elderly records will be retained as follows:
The Town of Easton amends and restates the ordinance relating
to tax relief for elderly homeowners, adopted pursuant to § 12-129n
of the Connecticut General Statutes for eligible residents of the
Town of Easton, on the terms and conditions provided herein. This
article is enacted for the purpose of assisting elderly homeowners
with a portion of the costs of property (real estate) taxation.
No later than August 15 of every third year commencing 2011,
or more frequently at the discretion of the Board of Selectmen, the
Board of Selectmen shall appoint a committee of not fewer than five
resident taxpayers of the Town of Easton which shall undertake and
complete, within 180 days following such appointment, or such longer
time as the Board of Selectmen shall authorize, a study and investigation
with respect to property tax relief for the elderly and, on the basis
thereof, prepare a report to the Board of Finance which report shall
include the following:
A.
With respect to the previous three years, the fiscal effect of such
property tax relief on property tax revenues for such years for the
Town of Easton; and
B.
Recommendations with respect to the form and extent of such property
tax relief for the following three years, including estimates of the
effect annually of recommended tax relief on property tax revenues.
After receiving the report from the Committee on Tax Relief
for the Elderly, the Board of Finance shall provide such comments
on the recommendations as it deems appropriate. The Committee on Tax
Relief for the Elderly shall consider the comments of the Board of
Finance and shall, to the extent deemed necessary and appropriate
by such Committee, present revised recommendations to the Board of
Finance. When the Board of Finance is satisfied with the recommendations
of the Committee, the Board of Finance shall recommend the plan for
adoption by the Town at a Town Meeting to be scheduled by the Board
of Selectmen. The Town Meeting shall, by majority vote, approve or
reject the recommended plan but shall not amend the plan. If approved,
the plan shall remain in effect until such time as a new recommended
plan is approved by the Town Meeting. If rejected, a new Committee
on Tax Relief for the Elderly, that may, but need not, contain members
of the preceding Committee on Tax Relief for the Elderly, shall be
convened. Until such time as a new plan for tax relief for the elderly
shall be adopted by the Town Meeting, the then current plan shall
remain in effect.
This article may, but need not, be amended and restated in its
entirety in the future. It shall be sufficient to submit as an amendment
to this article the provisions of the recommended or approved plan.
Under no circumstances shall tax relief provided under this
article result in a benefit to the estate of a deceased taxpayer and
to the eligible surviving spouse that would be separately, or together,
greater than the deceased taxpayer would have received if such deceased
taxpayer had lived.
If any person entitled to the tax relief pursuant to this article
transfers the property on which relief is granted, such tax relief
shall be prorated as of the date of transfer of title and the transferee
of such property shall pay the Town a prorated share of the tax relief
as provided by § 12-81a of the Connecticut General Statutes.
Tax relief under this article shall be allowed only once per
year for each eligible principal residence. In any case where title
to such real property is recorded in the name of an eligible applicant
(including such applicant's spouse) and any other person or persons,
the tax relief shall be prorated so as to allow tax relief equivalent
to the fractional share of ownership in the property of such eligible
applicant (including such applicant's spouse). In any case where such
real property is a multiple-family dwelling and is occupied by the
eligible applicant (including such applicant's spouse) and any other
person, the tax relief shall be prorated so as to allow tax relief
equivalent to the fractional portion occupied by such eligible applicant
(including such applicant's spouse). The Assessor shall determine
the proration amount in a multiple-family situation.
The total of all tax relief granted under this article shall
not exceed an amount equal to 4% of the total real estate property
tax assessed for the Town in the preceding tax year, and if such relief
would exceed such amount, it shall be prorated to keep the total amount
of Town tax relief within such 4%.
The Town of Easton shall not place a lien on any property for
which tax abatement is granted under this article in any amount by
reason of the granting of such abatement. However, the terms of this
section will not in any way affect the right of the Town of Easton
to have a lien on such property pursuant to any tax deferral granted
under this article or pursuant to any section of the Connecticut General
Statutes other than § 12-129n.
This article shall apply to real property taxes as are due and
payable commencing the fiscal year beginning July 1, 2012, and succeeding
fiscal years.
Any person who owns real property in the Town of Easton or is
liable, by reason of life use, for payment of taxes thereon pursuant
to § 12-48 of the Connecticut General Statutes, and who
occupies the property as a principal residence, shall be entitled
on the annual taxes for such property as are due and payable for the
fiscal year beginning July 1, 2012, to a credit against the real property
taxes on such residence based on the plan set forth in this article.
A.
This program shall be offered to those persons qualifying even though
their current taxes may be in arrears, provided that all of the following
conditions are met:
(1)
Such
person was 65 years of age or over on December 31 prior to the fiscal
year for which tax relief is sought, or his or her spouse was 65 years
of age or over on such December 31 and resides with such person, or
such spouse was, on such December 31, 60 years of age or over and
the surviving spouse of a taxpayer who was qualified for tax relief
under this article at the time of his or her death.
(2)
Such person, or such person's spouse, as described in Subsection A(1), shall have resided in the Town of Easton and paid taxes for a period of five years immediately prior to the fiscal year for which tax relief is sought.
(3)
The
property for which the tax relief is sought must be the principal
residence of such person, and such person's spouse (if any), for more
than 183 days of the fiscal year immediately prior to the fiscal year
for which tax relief is sought; however, should the applicant be confined
to a skilled nursing home for 365 days or less but intend to return
to the property, such person is entitled to tax relief.
(4)
Such person or such person's spouse as defined in Subsection A(1) shall file with the Assessor an application, in a form acceptable to the Assessor, not later than May 15 of the year following the October 1 grand list. The form shall require such information as the Assessor may reasonably require and shall be prepared by the Assessor subject to the approval of the Board of Selectmen.
(5)
Means
test; liquid assets. In order to qualify, each household must certify
that it has no more than $500,000 in liquid assets (i.e., cash, including
bank accounts, and marketable securities but exclusive of IRS recognized
retirement plans). The Assessor shall include the affidavit shown
in Appendix A of this article in each application form for tax relief.[1]
[1]
Editor's Note: Appendix A is included as an attachment to this chapter.
(6)
Before
the tax benefit created by this article or any portion thereof shall
be given, such person must first apply for tax relief under any state
statutes under which he or she is eligible.
B.
If in the Assessor's opinion the taxpayer does not qualify for tax
relief, she/he may refuse relief. In the event of a question with
respect to income or a claimed exemption of income, or deduction from
income, not specifically referred to in this section, the Assessor
or designee shall make a determination based upon the purposes of
this article. The Assessor may also refuse tax relief if there is
a question as to whether or not any application is bona fide. Any
person refused relief for any reason may appeal to the Board of Selectmen,
which may grant tax relief if in its opinion the Assessor has erred,
or where this article is not clear, or in case of extreme hardship
or extraordinary circumstances.
C.
There shall be a three-person advisory committee, appointed by the
First Selectman, to assist in resolution of any problems which arise
in administration of the tax relief program and to assist, if requested
by the Selectman, in interviewing and making recommendations on taxpayer
appeals to the Board of Selectmen.
The Assessor or his or her designee shall determine the income of each applying taxpayer, as defined in § 430-22 below. The Assessor or designee shall compile a list of all applying taxpayers whose income qualifies for tax relief. The Assessor or designee shall compute the amount of such relief.
The purpose of this article is to provide tax relief based upon
an assessment of the taxpayer's ability to pay taxes. Each applicant
shall sign an affidavit certifying that the information provided with
respect to such applicant's total income in the home is true and accurate
to the best of the applicant's knowledge and other information as
requested on the application form is true.
A.
Qualifying household income shall include the income of the taxpayer,
taxpayer's spouse, and all other adults who reside in the household
unless such other resident is a full-time student, a person receiving
social security disability income, or a renter. A renter is a resident
of the household who is not related to the applicant and pays fair
market rent and the rental income is included in the applicant's 1040
tax return. Documentation required to determine a resident's income
includes his or her income tax return for the prior tax year and documentation
of health care and health care insurance premium expenses.
B.
If qualifying household income is over the amount shown in Table
1 for maximum income, the taxpayer shall not be entitled to a tax
credit.
|
Table 1 — Income Limits and Abatement Calculation
Values
| ||||
|---|---|---|---|---|
|
IRS Tax Year
|
Town Fiscal Year
|
Maximum Income
|
Maximum Tax Credit
| |
|
2011
|
2012-2013
|
$85,000
|
42.0%
| |
|
2012
|
2013-2014
|
$85,000
|
42.0%
| |
|
2013
|
2014-2015
|
$85,000
|
42.0%
| |
C.
Income of each resident shall be calculated as follows:
|
No.
|
Income Item
|
Definition
| |
|---|---|---|---|
|
1
|
IRS adjusted gross income (AGI)
|
AGI as shown on Line 37 of IRS Form 1040 or Line 21 of Form
1040A
| |
|
2
|
Add: federal tax-exempt interest
|
IRS Form 1040 Line 8b
| |
|
3
|
Add: the portion of social security benefits exempt from taxation
|
IRS Form 1040 Line 20a - 20b
| |
|
4
|
Add: other nontaxable income, if any
|
Any other income or funds received and not reported as taxable
income on the 1040, including but not limited to all IRA distributions,
pensions and annuities
| |
|
5
|
Less: 1/2 of all out-of-pocket health insurance premiums
|
Medicare Parts B, C and D, Medicare supplement insurance, other
private health care insurance and long-term health care insurance
(not including the amount in 1040 Line 29)
| |
|
6
|
Less: medical expenses
|
From IRS Form 1040 Schedule A (less the amount in Line 5 above)
in excess of 20% of the balance of income calculated resulting from
Lines 1 to 5 herein
|
Subject to all other limitations contained in this article, the tax abatement provided under this article for the Town of Easton fiscal years 2012-2013, 2013-2014 and 2014-2015 (and for future years if this article remains in effect pursuant to § 430-11) shall be based upon the qualifying household income of an eligible applicant as follows:
A.
The tax credit shall be a maximum percentage (as shown in Table 1) of taxes due at zero income on a straight declining line to a lesser percentage of taxes due calculated via the tax abatement formula using values from Table 1. Each such person shall receive a credit determined on the basis of the formula shown in § 430-24.
B.
The tax credit will be rounded to the nearest dollar.
C.
In no case shall the tax credit exceed the maximum tax credit percentage
of the taxes due from Table 1 times percentage of ownership.
D.
The tax abatement provided under this article to a resident or residents
shall in no event, together with any relief received by such resident
or residents under the provisions of §§ 12-129b to
12-129d, inclusive, of the General Statutes, exceed in the aggregate
75% of the tax which would, except for §§ 12-129b to
12-129d, inclusive, and this article, be laid against such resident
or residents. Where the aggregate relief provided exceeds 75%, such
resident or residents will receive only that portion of such tax relief
equal to 75% of the tax due.
Tax abatement shall be calculated as follows:
B.
Tax abatement formula. Tax Abatement = Maximum Tax Credit x Ownership
Taxes Due x Income Multiplier.
(1)
Maximum
tax credit is: from Table 1.
(2)
Property
taxes due are: assessed value x mil rate.
(3)
Ownership
taxes due are: percentage ownership x property tax due.
(4)
Income
multiplier is: [maximum income - qualifying household income]/maximum
income.
|
Example 1:
| ||
|
Maximum credit
|
= 42%
| |
|
Ownership
|
= 100%
| |
|
Last year's property taxes due
|
= $8,000
| |
|
Last year's income
|
= $45,000
| |
|
Income multiplier
|
= [85,000-45,000]/85,000 = 0.47
| |
|
Tax abatement
|
= 0.42 x 1.0 x 8,000 x 0.47 = $1,579
| |
|
Assume this year's taxes due
|
= $8,200
| |
|
Taxes due after abatement
|
= $8,200 - $1,579 = $6,621
| |
|
Example 2:
| ||
|
Maximum credit
|
= 42%
| |
|
Ownership
|
= 50%
| |
|
Last year's property taxes due
|
= $8,000
| |
|
Last year's income
|
= $50,000
| |
|
Income multiplier
|
= [85,000-50,000]/85,000 = 0.41
| |
|
Tax abatement
|
= 0.42 x 0.5 x 8,000 x 0.41 = $689
| |
|
Assume this year's taxes due
|
= $8,200
| |
|
Taxes due on 50% ownership
|
= $4,100 (co-owner pays the other $4,100)
| |
|
Taxes due after abatement
|
= $4,100 - $689 = $3,411
|
C.
The tax credit is rounded to the nearest dollar.
A.
Tax deferral shall be allowed in addition to tax abatement.
B.
The taxpayer may defer up to 75% of taxpayer's remaining tax bill
after all other programs have been applied (subject to any state-mandated
percentage maximum on relief).
C.
The total deferral pool for each year shall be $80,000 plus the excess
deferral amount over $80,000 of the last taxpayer to qualify.
D.
Deferrals will be allocated by income, lowest income first, until
all of the deferral pool is allocated.
E.
Deferral shall apply separately to each year's tax bill (i.e., 2012-2013 taxes of a taxpayer who is awarded deferral for 2012-2013 fiscal year shall continue to be deferred in all subsequent years, without further qualification, until termination as per Subsection I below).
F.
For the next year's (fiscal year 2013-2014) taxes and every subsequent year the taxpayer must apply and qualify again for deferral and must also fit within the $80,000 allocation as per Subsection C above.
H.
Lien.
(1)
The Tax Collector shall make a list of the deferrals granted for
the coming tax year and shall, as soon as possible following January
1, file a tax lien on the land records for each deferral granted.
(2)
The lien shall be filed using a form to be prepared by the Tax Collector.
The form shall, inter alia, state the rate of interest applicable
for the duration of the lien.
(3)
Interest will be calculated and applied to the lien according to
the Tax Collector's standard practices.
I.
Termination. The tax deferral shall terminate and all accrued interest
shall become due and payable, along with the total amount of deferred
taxes, upon the taxpayer's sale or transfer of the property, or when
the taxpayer no longer resides in the residence on the property, or
the taxpayer's death, whichever comes first, except that if the title
passes by deed or by operation of law (will, intestacy or survivorship)
to a qualified spouse, the tax deferral shall continue.
J.
Thirty days after termination (but six months in the case of death),
the interest rate on all deferred taxes shall resume at the then current
tax year's interest rate plus 4%, and the Town may thereafter bring
foreclosure proceedings on all of the unpaid deferral tax liens.
K.
Individual deferral limits. For any taxpayer the total of all tax
deferrals (with interest either calculated or approximated at 4% per
annum) may not exceed the assessed value of the taxpayer's home, less
the then current mortgage (or home equity loan) balances and less
any overdue and unpaid Town taxes (with statutory 18% interest on
overdue and unpaid Town taxes).
L.
Prepayment. Deferred taxes may be repaid at any time. A partial prepayment
will be applied first to prepayment of interest on the oldest tax
lien, then to principal on the oldest tax lien.
The tax deferral benefit shall be calculated as follows:
A.
Basis. Tax deferral is based on the following:
(1)
Calculation of abatement amount is done prior to deferral calculation.
(2)
Calculation of state circuit breaker amount is also done prior to
deferral calculation.
(3)
Amount of taxes allowed to be deferred is 75% of the remaining tax
after all other tax relief has been taken.
(4)
Interest on the deferred taxes is equal to the Town borrowing rate.
B.
Tax deferral formula.
(1)
Tax deferral = (taxes due - tax relief) x 0.75.
(2)
Tax relief = (tax abatement amount) + (circuit breaker amount).
|
Example
| ||
|
Last year's property taxes due
|
= $8,000
| |
|
Ownership
|
= 100%
| |
|
Last year's income
|
= $35,000
| |
|
Income multiplier
|
= [85,000-35,000]/85,000 = 0.59
| |
|
Tax abatement
|
= 0.42 x 1.0 x 8,000 x 0.59 = $1,982
| |
|
Circuit breaker
|
= $750
| |
|
This year's taxes due
|
= $8,200
| |
|
Taxes due after all relief
|
= $8,200 - $1,982 - $750 = $5,468
| |
|
Tax deferral allowed
|
= $5,468 x 0.75 = $4,101
|
