Town of Lyme, CT Elderly Tax Relief Program

[Adopted 1-8-1988 by Ord. No. 88-2; amended in its entirety effective 6-15-2007 by Ord. No. 2007-1]

The objective of the Elderly Tax Relief Program is to "freeze" the real estate taxes of taxpayers who qualify under this program at their current level, subject to budgetary restrictions set forth below. This program is intended as an additional form of tax relief to any existing state and local program, including veteran's relief.

§ 279-3 Eligibility requirements.

The elderly tax relief benefit shall be available to those taxpayers or their spouses or civil union partners with respect to real property located in the Town of Lyme owned and occupied as their principal residence in Lyme who are:

(1)

Sixty-five years of age and over or whose spouses or civil union partners, living with them, are 65 years of age or over; or 60 years of age or over and the surviving spouse or surviving civil union partner of a taxpayer qualified under this plan at the time of his or her death; or with respect to real property located in the Town of Lyme occupied as their principal residence on which such residents, or their spouses or civil union partners, are liable for taxes under § 12-48 of the Connecticut General Statutes; or

(2)

Under age 65 and eligible in accordance with applicable federal regulations to receive permanent total disability benefits under social security or who have not been engaged in employment covered by social security and accordingly have not qualified for benefits thereunder but have become qualified for permanent total disability benefits under any federal, state or local government retirement or disability plan, including the Railroad Retirement Act and any government-related teachers' retirement plan in which requirements with respect to qualifications for such permanent total disability benefits are comparable to such requirements under social security.

The elderly tax relief benefit shall be available to taxpayers, their spouses or civil union partners whose total adjusted gross income for purposes of the federal income tax, plus any other income not included in such adjusted gross income (the total of which shall be called "qualifying income"), does not exceed the limits as set forth in Subsection C below. "Qualifying income" shall be defined as all monies received unless specifically exempted, and includes wages, bonuses, commissions, fees, self-employment net income, gross social security income, payment for jury duty, dividends and interest, whether taxable or tax-free, and annuities, income from any and all tax-free municipal bonds or other tax-free investments, IRA income to the extent that is taxable, interest or proceeds from gifts, lottery winnings, net income from sale or rent of real or personal property, pensions, including veterans and railroad retirement, severance pay, unemployment compensation, workers' compensation, alimony and all other sources of income as defined by the Office of Policy and Management. Specifically excluded are social security payments specifically for a dependent person, casualty loss reimbursements by insurance companies, gifts, bequests or inheritances (although interest or other income produced by gift, bequest or inheritance must be included), grants for disaster relief, life insurance proceeds and all other exempt sources of income as defined by the Office of Policy and Management. Evidence of such income shall be required, and a signed affidavit shall be submitted to the Lyme Assessor when application for benefits under this plan is filed.

To be eligible for the elderly tax relief benefit, all such taxpayers or their spouses or civil union partners shall have been taxpayers of the Town of Lyme for not less than five years as of the first day of October prior to the filing period and have qualified income of not more than $40,000 single or $47,500 married/civil union.

All such taxpayers or their spouses or civil union partners who may qualify for tax relief under § § 12-129b to 12-129d, inclusive, and § 12-170aa of the Connecticut General Statutes must apply for and be included, if qualified, in such program or programs as a condition precedent to qualifying for and receiving benefits under the Elderly Tax Relief Program. This provision shall not apply for applications concerning the October 1, 2007, grand list for taxes due and payable on July 1, 2008.

No such taxpayers or their spouses or civil union partners shall be eligible for any benefit under the Elderly Tax Relief Program if they are in arrears on any taxes owed the Town, including but not limited to motor vehicle and personal property taxes.

If a qualifying taxpayer owns the property jointly with a non-spouse or non-civil union partner, tax relief under the Elderly Tax Relief Program will be proportionate to the taxpayer's interest in the property.

If property is held in trust for a person who would otherwise qualify for the Elderly Tax Relief Program, the tax relief may still be granted if the claimant is the primary beneficiary of the trust and the claimant meets all other requirements under this program. Under these circumstances, the application for relief shall be accompanied by a copy of the trust agreement. The trust agreement shall be reviewed and approved by the Tax Assessor, in conjunction with the Town Attorney, at the Tax Assessor's discretion prior to any relief being granted to the claimant.

For purposes of this section, "medical expenses" are defined as those medical expenses eligible to be claimed as deductions on Schedule A of Internal Revenue Form 1040. These expenses include, for example, nursing home expenses, but do not include medical expenses reimbursed or paid by an insurance company or other sources, whether the payments were made directly to the participant, the patient, or to the provider of the medical services. If a participant in the program has incurred income due to the need to pay medical expenses in an amount that equals or exceeds the amount of medical expenses that have been deducted as medical expenses on Schedule A of Internal Revenue Form 1040, that income causes the participant's income to exceed the participant's prior year's income by at least 10%, and that income would otherwise disqualify the participant from continued participation in the program, then upon satisfactory proof to the Assessor that the income was due to the need to pay medical expenses, the Assessor shall deduct from the most recent annual income the amount of medical expenses reported to the Internal Revenue Service on Schedule A of Form 1040 as an itemized deduction. The Assessor shall use this figure to determine the participant's continued eligibility to participate in the program. In determining whether the income was due to the need to pay medical expenses, the Assessor shall require the participant to submit the participant's federal tax returns for the three years preceding the year for which the elderly tax benefit is being sought so that the Assessor may compare the participant's income and medical expenses for the current year with the participant's income and expenses for the three prior years.

§ 279-4 Application process.

The application for the Elderly Tax Relief Program shall be a form which has been developed and approved by the Assessor's office of the Town of Lyme. In developing the application and applying this program to individual properties, the Assessor shall be guided by the policies developed by the Office of Policy and Management in administering the state's tax relief programs set forth in Connecticut General Statutes §§ 12-129b et seq. and 12-170aa. An applicant for the Elderly Tax Relief Program must file a written application for the program annually between February 1 and May 15.

§ 279-5 Termination.

Tax relief under the Elderly Tax Relief Program ends on the date that the property is sold or transferred, or on the date of death of the qualifying owner or qualifying spouse or qualifying civil union partner, whichever is earlier. If such sale, transfer or death occurs prior to the filing period, the benefit shall be removed as of October 1. If such sale, transfer or death occurs after the filing of an application, the benefit shall be prorated unless there is a surviving spouse or surviving civil union partner.

§ 279-6 Establishing cap and annual review.

Every five years, the Board of Finance shall establish a maximum amount, or "cap," for the aggregate amount of benefits available under this program. The Board of Finance may decide to establish a new cap for the aggregate amount of benefits available under this program in any year within this five-year time frame. This cap shall not be less than 1/2 of 1% of the previous year's total Town and educational budgets. The Board of Finance shall review the percentage of the cap of the Elderly Tax Relief Program for the purpose of determining suitability and shall at the same time set the dollar amount of the cap.

After consultation with the Assessor, the Board of Finance shall determine whether the aggregate amount of benefits sought under this program exceeds the dollar amount of the cap. If the Board of Finance determines that the cap is exceeded, it shall direct the Assessor to prorate the benefits in accordance with the following formula: total excess relief over cap/total base property tax of all participants x participant's base tax = increase in participant's property tax. The increase in the participant's property tax thereby increases the base and establishes a new base tax (adjusted basis). "Base tax" shall be defined as the amount of tax levied on the property at the time the taxpayer qualifies under the Elderly Tax Relief Program. "Base year" shall be defined as the first year of qualification in the Elderly Tax Relief Program. "Excess over cap" shall be defined as the amount of tax relief which exceeds the cap set by the Board of Finance.

An example of the proposal would be:
	Cap set by the Board of Finance	$30,000
	Total tax of all participants	$100,000
	Total relief to all participants	$35,000
	Sample tax for Participant A - base year	$1,500
Excess over cap ($35,000 - $30,000) = $5,000 / $100,000 x $1,500 = $75 amount of increase of Participant A's property tax

§ 279-7 Coordination with other tax relief programs.

The benefits under this program shall not be in lieu of benefits available under any state tax relief program or veteran's relief.

§ 279-8 Interpretation to be consistent with state tax relief programs.

This article shall be interpreted and applied in a manner that complements and is consistent with existing state tax relief programs. The policies and interpretations adopted by the Office of Policy and Management in construing state tax relief programs shall be utilized in interpreting and applying the provisions of this article.

§ 279-9 Right of appeal.

Any person aggrieved by the action of the Assessor in determining the amount of relief or in disapproving any such application under this article may appeal to the Board of Selectmen or a three-member committee appointed by the Board of Selectmen for such purpose, in writing, within 10 days after the date of the written notification of the Assessor on such application. The Board of Selectmen or said appointed committee shall promptly consider such appeal and may grant or deny the relief requested or make such other modifications necessary to comply with this article.

§ 279-10 Program initiation date.

This article is effective on the October 1, 2007, grand list for taxes due and payable on July 1, 2008.

§ 279-11 Retroactivity.

Notwithstanding the eligibility requirements, age, disability, income, residence, and participation in state programs provisions of § 279-3 herein, any taxpayer or his or her spouse or civil union partner who is participating in the Lyme Elderly Tax Relief Program under Lyme Ordinance No. 88-2 at the time of the effective date of this article shall continue to have his or her real estate taxes frozen as of 1985 in the year this article takes effect.