The Homestead Credit Provides Property Tax Relief

By State Senator Jon Erpenbach

One of the many ways the state of Wisconsin provides property tax relief is through the Homestead Tax Credit. This credit is targeted towards families with less than $24,500 in annual household income and individual households received credits as high as $1,160. The average credit was $504. The Homestead Credit Program is especially valuable for seniors with fixed incomes, and low to middle income families. Renters are also eligible to participate in the program because a portion of their rent that goes towards property taxes.

The Homestead Tax Credit is “refundable”, meaning families with tax bills smaller than size of the credit actually receive a check back from the state for the difference. This puts cash directly into the pockets of Wisconsin families. According to the nonpartisan Legislative Fiscal Bureau, the Homestead Tax Credit provided $118.7 million property tax relief to 235,000 households in 2003. However, that is only half of the 470,000 people estimated to be eligible for the credit.

So this year Governor Doyle and the Wisconsin Department of Revenue (DOR) created a new simplified tax form, which is designed to make it easier for elderly and low-income residents to claim the homestead credit. The new form, called “Homestead-EZ”, is a simplified, one page form that can also be e-filed for those who file their taxes electronically or at the DOR website.

The Homestead Credit Program was created in 1964 to reduce the impact of property taxes on senior citizens and low to moderate-income households. Both homeowners and renters can qualify and the only financial test used to determine eligibility is household income. The homestead credit reduces an individuals state income tax obligation and for those who owe no tax, the Homestead Credit will produce a refund. In 2003, 41 percent of those receiving a refund were senior citizens.

I want to make sure every low-income household that qualifies for the homestead credit and earned income credit is getting them. Individuals and corporations at the high end of the income scale certainly make sure they take advantage of every tax break and loophole available to them. Better outreach and the new Homestead-EZ form will increase utilization of these credits by low-income households."

For more information about the Homestead Credit program, visit the Department of Revenue website at: www.dor.state.wi.us You can also contact me, toll-free, at: 1-888-549-0027 or 266-6670 or by email at: Sen.Erpenbach@legis.state.wi.us if you would like me to mail you a copy of the Homestead-EZ form, or for any other matter.