Thursday, April 17, 2014
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"All bets are off. I have to make some changes. I'm going to sell my house and rent something cheaper. There's nothing left to cut -- there's food, air, oil. What's left to trim?" Pelletier said.
The state sent the letter this week explaining the changes to people who would typically get a property tax or rent refund check in August. That letter, as well as information listed on the Maine Revenue Services website, is all the state did to alert people who would otherwise be expecting a check, Allen said.
The new refundable tax credit will get some "outreach efforts" from the state, and through word of mouth from tax professionals and volunteer groups who work with low-income and older residents, Allen said.
The circuit breaker program had been promoted on the Maine Revenue Services website, at local libraries and through notices posted on municipal websites.
The change in tax relief programs will save the state's general fund an estimated $20 million to $25 million, Allen said. That number is based on the total amount the property tax and rent refund program would have cost had it continued, he said. The circuit breaker program was budgeted at just over $43 million in fiscal 2012.
There are other tax-relief programs available for homeowners, such as the homestead exemption, which subtracts $10,000 from the assessed value of a Mainer's home for the purpose of assessing property taxes. Some narrow exemptions also exist for certain veterans.
The new program aims to help Maine homeowners or renters who make $40,000 a year or less. To qualify, individuals must have paid property tax on a home in Maine that was more than 10 percent of their Maine adjusted gross income, or paid rent that was more than 40 percent of Maine adjusted gross income.
Social Security does not count as income. Sources of income include pensions and retirement pay, distributions from an IRA or 401K plan, rental income from real estate, interest from dividends from stocks or bonds, unemployment benefits, as well as damages paid under court judgments.
To get the tax credit, individuals must file state tax returns and fill out a special worksheet, which will be available in January.
Jessica Hall can be contacted at 791-6316 or at: