Application Processing is Underway for Homestead Preservation Credit

 Application Processing is Underway for Homestead Preservation Credit

JEFFERSON CITY – The Missouri Department of Revenue (Department) is continuing to process applications for the Homestead Preservation Credit program that provides a real estate property tax credit to qualified senior citizens and disabled persons. Applications must be postmarked between April 1, 2008 and October 15, 2008, to be eligible.

The Homestead credit is provided to 100 percent disabled persons or to Missourians age 65 or older as of January 1, 2008. To qualify if married, one spouse must meet the age 65 requirement and the other spouse must be age 60 or older. Additionally, the applicant(s) must:

Have a 2007 Federal Adjusted Gross Income (FAGI) of $77,323 or lower;
Submit copies of paid real estate property tax receipts for the previous three years (for example, an application this year would require proof that 2005, 2006, and 2007 property taxes were paid); and
Own and occupy the property.
The program has been expanded to include property held in trust and property with improvements, over 5 percent of the homestead’s value, made to accommodate a disabled person. Also, property is eligible if it is owned by two or more unmarried persons who meet the above eligibility requirements and whose combined income does not exceed $77,323.

If an applicant meets the qualifications, the timeline below shows the process through which a person would receive the credit:

April 1 – October 15, 2008: The applicant submits an application to the Department, including copies of paid property tax receipts from 2005, 2006, and 2007.

October – November 2008: The Department reviews the applications to determine eligibility.

December 15, 2008: The Department sends a list of all verified eligible owners to the county assessors.

January 15, 2009: Assessors provide the Department with a listing of eligible owners that made improvements not for accommodation of a disability and the amount of the assessed value of those improvements.

January 2009: The Department compiles information for appropriation request and provides this information to the legislature.

May 2009: The legislature appropriates funding for Homestead Preservation Credit; a legislative appropriation is required to issue the credit. (If the Homestead Preservation Credit is not fully funded, eligible applicants’ credit amount will be prorated.)

August 2009: The Department then notifies the applicant’s local county assessor/collector of the amount of the applicant’s credit.

October 2009: The applicant’s county collector receives a wire of the credit amount for all eligible county property owners.

November/December 2009: The eligible applicant receives a real estate property tax bill from their county assessor showing the application of the Homestead Preservation Credit against the real estate property tax bill.

For example, if an applicant’s property tax bill was $1,000 in 2006 and increased to $1,200 in 2007, the portion eligible for the credit is only that amount greater than a 5 percent increase. In this example, 5 percent is $50. Therefore, any amount over $1,050 is eligible for credit, which in this case is $150. After applying in 2008 for the $150 credit, the credit would appear on the applicant’s 2009 property tax bill.

The Homestead Preservation Credit program does not provide an applicant with a refund check from the state or county government. Instead, the program creates a credit on the following year’s property tax bill. The average credit last year was $54.13, which was for a non-reassessment year based on a 2.5 percent increase. For more information, please e-mail homestead@dor.mo.gov, or visit the Department’s web site at www.dor.mo.gov/tax/personal/homstead/ or call (573) 526-8942.