Tax Insights

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How to claim a refund or credit for paying property taxes

Did you know it is possible to receive a partial refund or Arizona income tax credit for paying Arizona property taxes? Even if you do not directly pay your Arizona county assessor? That’s right, it is even possible to qualify if only paying rent. For 2019, this amount is up to $502, based on your household income, not to exceed the amount actually paid for property taxes.

Don’t miss: 2019 Arizona Tax Credit update

So who qualifies? For 2019, a taxpayer must satisfy all the following:

  • 65 or older on the last day of the year or receiving Title 16 Supplemental Security Income payments during the year.
  • An Arizona resident for the entire year.
  • Owned or rented their main home during the year. If renting, it must be for the entire year. Also, qualifying are residents of nursing homes, shareholders of cooperative corporations, and members of condominium associations if it is the taxpayer’s primary residence.
  • Household income does not exceed $3,750 for taxpayers living alone and $5,500 for households of two or more.

To claim, Arizona Form 140PTC must be filed timely or extended and additional support attached. If you qualify for this credit by receiving Supplementary Security Income, also provide a statement from the Social Security Administration.

If you paid property taxes directly to the county, provide proof the tax was paid such as a receipt or canceled checks. It is also important to note that amounts actually paid for property tax (not penalties, interest, or fees) during the calendar year apply towards your credit. This means that if you paid your 2018 bill during 2019, that amount would also be applied towards your 2019 credit.

Learn more: Putting the STATE in estate taxes

If you rent and do not pay property taxes yourself, you will need to obtain and provide Arizona Form 201, Renter’s Certificate of Property Taxes Paid. This form must be completed by your landlord or nursing home administrator to report the amount of rent paid that constitutes property taxes. As for cooperative corporations and condominium associations, a property tax statement from your mortgage company or a copy of the paid bill will suffice.

As a new homeowner, I am not thrilled about adding property taxes to my list of yearly expenses. However, I remind myself that Arizona is one of the better states to live in when it comes to property taxes. If you think you may qualify for this credit, be sure to inquire with your Henry and Horne tax professional and gather up the necessary documents when it comes time to file your return.

 

Katie Ripp, CPA

 

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