Issue: Tax Reform, Act 1 of 2006
When new legislation passes, PSBA is seen as the leader in analyzing it and helping members make sense of it.
Act 1 NEWSLETTER
Vol. 1, No. 18, March 8, 2007
IN THIS ISSUE: Increases in benefits to certain senior citizens under Act 1, who can vote on May 15.
SUMMARY : As we've said many times, Act 1 is a melding together of several pieces of legislation, including legislation designed to increase benefits to certain senior citizens. Specifically, this has been accomplished by increasing both the benefit level and the eligibility for the Senior Citizen Property Tax and Rent Rebate program.
The information in this newsletter will give you a better idea of the changes for senior citizen benefits contained in Act 1. Along with information on tax shifting, referendum and gaming, this information should be a key part of any presentation you make to your community regarding Act 1.
Act 1 describes an eligible individual or a claimant as a person who was at least 65 years of age or whose spouse, if a member of the household, was at least 65 years of age during a calendar year in which real property taxes or rent were due and payable.
A claimant also can be a person who was a widow or widower and at least 50 years of age during a calendar year or part of a calendar year in which real property taxes or rent were due and payable or any individual who is permanently disabled and is 18 years of age or older during a calendar year in which real property taxes or rent were due and payable.
The term "income" is defined as all income from whatever source derived, including, but not limited to: 1) salaries, wages, bonuses, commissions, income from self-employment, alimony, support money, cash public assistance and relief; 2) the gross amount of any pensions or annuities, including railroad retirement benefits for calendar years prior to 1999 and 50% of railroad benefits for calendar years 1999 and thereafter; 3) all benefits received under the Social Security Act, except Medicare benefits, for calendar years prior to 1999 and 50% of all benefits received, except Medicare, for calendar years 1999 and thereafter,; 4) all benefits received under state unemployment insurance laws and veterans' disability payments; 5) interest received from the federal or any state government, instrumentality or political subdivision thereof; 6) realized capital gains and rentals; 7) workers' compensation; 8) the gross amount of loss-of-time insurance benefits, life insurance benefits and proceeds, except the first $5,000 of the total death benefit and 9) gifts of cash or property, other than transfers by gift between members of a household, in excess of a total value of $300. The term does not include surplus food or other relief in kind supplied by a governmental agency property tax or rent rebate or inflation dividend.
The maximum income for eligibility has been increased from $15,000 to $35,000 for property owners only. It remains at $15,000 for renters. The amount of benefits paid for any real property taxes due and payable during the calendar year 2006 and thereafter is as follows:
| Household Income Benefit | |
|---|---|
| $0-$8,000 | $650 |
| $8,001-$15,000 | $500 |
| $15,001-$18,000 | $300 |
| $18,001-$35,000 | $250 |
There is a supplemental amount available for claimants having a household income of $30,000 or less and who are eligible for a property tax rebate and whose real property taxes exceed 15% of the claimant's household income. The supplement is equal to an additional 50% of the base amount of the benefit. Claimants in Philadelphia , Pittsburgh and Scranton are not eligible for this supplement but are eligible for an additional property tax rebate of 50% of the base benefit if their household income is equal to or less than $30,000. This geographical benefit does not take effect until property tax reduction allocations are made to school districts from gaming funds.
Claims for rent rebate made for rent that is due and payable during the calendar year 2006 and thereafter will be determined in the following manner:
| Household Income Benefit | |
|---|---|
| $0-$8,000 | $650 |
| $8,001-$15,000 | $500 |
There are no supplemental benefits for renters and rent does not include subsidies provided by or through a governmental agency. Those individuals receiving public assistance are not eligible for the rent rebate program.
The maximum amount of property tax or rent rebate in lieu of property taxes payable cannot exceed the lesser of 1) the amount of a claim; 2) the amount of real property taxes actually paid; or 3) 20% of gross rent actually paid.
Informing potentially eligible senior citizens about how they can file a claim under this program is also an important task with which the school district can assist. The rules are fairly simple. Anyone wishing to file a claim must do so to the PA Department of Revenue on or before June 30 of the year following the end of the calendar year in which the property taxes or rent was due. In other words, claimants would have to file on or before June 30, 2007, for property taxes or rent due or payable in calendar year 2006. A claim can be filed after June 30 and before Dec. 31, but it will only be paid as long as funds are available to pay the benefits.
Claims must include reasonable proof of household income; the size and nature of the property claimed as a homestead; the rent, tax receipt or other proof that the real property taxes on the homestead have been paid or rent in connection with the occupancy of a homestead has been paid; a declaration of status as a widow or widower in such manner as prescribed by the Secretary of Revenue; and proof that a claimant is eligible to receive disability benefits under the Social Security Act, which constitutes proof of disability. The first claim filed by an individual must contain proof that the claimant or the claimant's spouse was at least 65 years of age, or at least 50 years of age in the case of a widow or widower, during the calendar year in which property taxes or rent were due and payable.
It also may be worthwhile to note that while most property tax reduction benefits, i.e., the homestead/farmstead exclusion, will be shown as a reduction on individual school property tax bills, the benefits from the Senior Citizens Property Tax and Rent Rebate program come in the form of actual rebate checks mailed to eligible claimants.
Several board members expressed a desire to be of help to citizens seeking to apply for these benefits. Probably the best way for that to occur is for the district to advertise in its newsletters and/or on its publicly available web site that they have the forms and the instructions for filling it out available for interested parties. These forms can be clicking on the following link: http://www.revenue.state.pa.us/revenue/lib/revenue/2006_pa-1000_fillin.pdf . Instructions are available at http://www.revenue.state.pa.us/revenue/lib/revenue/2006_pa-1000_book.pdf .
Independent, minor party voters can vote on May 15.Judging by the calls received by PSBA, there is a lot of uncertainty over whether persons registered as Independents or as members of a "minor" political party, such as the Libertarian or Green parties are eligible to vote in the May 15 primary. According to the Bureau of Elections, PA Department of State, all polling places are required to have a form that includes only the referendum questions so that independents and minor party members can have their say.