Learn about the Circuit Breaker Credit

If you’re 65 or older and you pay rent or own a home, you may qualify for the Circuit Breaker Credit. It’s a refund of part of your property taxes.

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The Details

Overview

Only seniors — people age 65 and older — can claim the Circuit Breaker Credit, which is a refund of up to $1,070 on the real estate taxes you pay to your city or town. You can claim the credit if your primary residence is in Massachusetts. 

If you qualify for the Circuit Breaker Credit, you have to file a state income tax return to claim it, even if you aren’t required to file otherwise.

Eligibility

There are many factors that affect whether or not you can claim this tax credit. You can read the full description of the rules that apply to the Circuit Breaker Credit for more in-depth information, but here are some of the most important qualifications:

  • You’re over 65.
  • Your total income is less than $57,000 (single non-head of household filer), $71,000 (single head of household filer), or $86,000 (joint filers).
  • The home is your primary residence.
  • The home was worth less than $720,000 as of Jan. 1, 2016.
  • You pay real estate taxes to your town (if you rent, part of your rent goes to property taxes).

You don’t qualify for the credit if:

  • You’re married filing separately.
  • You receive a federal or state housing subsidy.
  • You rent from a landlord who doesn’t have to pay property taxes.
  • You don’t have a landlord-tenant relationship with the facility you live in (typically assisted living or nursing homes).
  • You’re the dependent of another taxpayer.

How to

The tax credit you get is equal to the amount of property taxes you paid that goes over 10% of your total income for the year (up to $1,070).

There are 4 steps to figure out what your credit could be and claim it on your return.

  1. Calculate how much you paid in property taxes.

    If you rent, consider 25% of your rent for the calendar year as your property taxes. This may not always be 12 months’ rent. For example, if you paid first and last month’s rent in January 2016, and then renewed your lease and paid regular rent in December 2016, you have paid 13 months’ rent for the year.

    If you own, start with the amount of property taxes you paid for the year. Subtract the cost of any real estate abatements, exemptions, or reductions you’ve received and any interest or penalties for late payments in the year. Then, add the value of any home improvements (called betterments) and half of your water and sewer bills for the year if your town includes them in its property tax assessment.

    Some towns in Massachusetts don’t include water and sewer bills in their property tax calculations. Contact your town if you aren’t sure.

  2. Calculate your total income for the year.

    To figure out your total income, start with your Massachusetts adjusted gross income, then add anything else you’ve earned from social security, pensions, real estate, and other sources that aren’t included. Then, subtract the personal income exemptions for dependents, over age 65, or blindness from that amount.

  3. Subtract 10% of your total income from the amount of property taxes you paid.

    What’s left is the amount you can claim for the Circuit Breaker Credit, up to $1,070. If the amount you got is more than that, you should claim $1,070.

  4. Claim your credit on your state tax return.

    The way you claim it depends on how you choose to file your state income tax return. You have to file a return to claim this credit.

Online

If you e-file your state tax return, your tax preparation software should prompt you to check what credits you’re eligible for. Follow the instructions to calculate your credit and claim it on your return.

By mail

If you’re filing a paper tax return, use the Schedule CB form and worksheet to calculate and claim your credit. Send this document to DOR with the rest of your return.

If you think you qualify and are getting help with your taxes from a tax preparer or at a free tax preparation site, ask about the Circuit Breaker Credit.

More info

There are a lot of special circumstances that can affect whether you qualify for the Circuit Breaker Credit, and how much you can claim. Some of the most common are:

  • Owning a home in a multi-family dwelling
  • Living in a single-family home with multiple owners
  • Owning a home on more than 1 acre of land
  • Not having a landlord-tenant relationship with the owner of your home (common in assisted living facilities)
  • Having property in a trust

You can learn more about these special provisions for real estate tax payments and valuations from DOR.

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