05/15/13 — Deadlines looming for tax programs

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Deadlines looming for tax programs

By Steve Herring
Published in News on May 15, 2013 1:46 PM

The deadline is just two weeks away to apply for one of the state's property tax-relief programs.

The Senior Citizen/Disability Homestead Exclusion and the Disabled Veteran Property Tax Exclusion programs provide actual tax exemptions on property.

Applicants might qualify for more than one program, but might receive benefits from only one.

"We try to calculate which one would give them the most exemption," said Alan Lumpkin, Wayne County assistant tax administrator.

Two other programs, the Homestead Circuit Breaker Tax Deferment program and the Present Use Value Assessment for Agricultural, Horticultural and Forestlands, defer taxes.

The application period for all of the programs ends June 1. Applications submitted during that time may be approved by the county tax office.

Late applications must be approved by Wayne County commissioners, who over the past year have approved a number of them -- mostly for the present use program.

Many of the late filers said they were either unaware of the program or the requirement that the application must be resubmitted when the property changes ownership or usage.

People who own property that is being farmed or that is under a forestry management program may apply for the present use program. If approved, the property is taxed at what is called present use value, which is a lower taxing schedule than the market value schedule used by the county.

The tax difference between the market and present use values is a deferred tax and is in effect a lien on the property.

The taxes remains deferred until the use of the property is changed or a portion or all of the property is deeded to someone else -- even if that someone is a relative.

Once that happens, the prior three years of deferred taxes preceding the current tax year become due and payable, as does the current year's assessment.

To keep that from happening, the property owner must reapply and be approved for the program.

The Senior Citizen/Disability Homestead Exclusion program is open to North Carolina residents who are 65 or older, or totally and permanently disabled, and who own and occupy their own home.

Also, all the money an applicant receives during the year must total $28,100 or less. That amount includes all money received such as Social Security, VA benefits and interest income.

For married applicants residing with their spouse, the income of both must be included, even if only one owns the property.

If approved, the owner receives a minimum tax break of $25,000 or half the value of the home, whichever is more.

The Disabled Veteran Property Tax Exclusion program requires a one-time application. There are no age or income restrictions.

For people who qualify, a flat $45,000 is deducted from the value of the home, with the person paying tax on the difference of the balance. The house must be the person's permanent residence that they own and occupy.

The applicant must be a North Carolina resident and an honorably discharged, disabled veteran, who, as of Jan. 1, has a total and permanent service-connected disability or who receives benefits for specially adapted housing under a certain federal code.

Also eligible are the unmarried surviving spouses of honorably discharged disabled veterans.

To qualify for the Homestead Circuit Breaker Tax Deferment Program a person must be a North Carolina resident, 65 years of age or totally and permanently disabled.

They must have owned and occupied the home as their permanent legal residence for five years.

Their income cannot exceed 150 percent of the income eligibility limit for the Elderly/Disabled Exclusion.

If the income is $28,100 or less, taxes are limited to 4 percent of their income. If their income is greater than $28,100, but not more than $42,150, taxes are limited to 5 percent of their income.

Calculated taxes that exceed the 4 percent or 5 percent limits are deferred taxes and are a lien on the property.

Also, interest accrues on deferred taxes as if they had been payable on the original due dates.

Payment of the deferred taxes can be triggered by the death of the owner unless ownership passes to a co-owner or spouse; transfer of the property unless the title passes to a co-owner, or to a spouse as a result of a divorce proceeding; or the owner ceases to use the property as a permanent residence.

If payment is triggered, the last three years of deferred taxes preceding the current tax year become due and payable.

The only exception is when the owner dies. When that happens the deferred taxes become delinquent on the first day of the ninth month following the date of the owner's death.

Annual applications are required to verify annual income. The tax collector notifies each owner by Sept. 1 of each year of the accumulated sum of deferred taxes and interest.

Application forms for these programs and more information are available by calling the Wayne County Tax Department at 919-731-1461 or by downloading the forms from the county website, www.waynegov.com.