Exemptions Cheryl Spraggins Georgia Department of Revenue Homestead

Exemptions Cheryl Spraggins Georgia Department of Revenue

Homestead Exemption n n n O. C. G. A. 48 -5 -40 State portion only $2, 000 $4, 000 $50, 000 Varying 100% on 10 acres

Rules n n n Real Property & Land surrounding Own on January 1 Permanent and Legal Residence Used as a dwelling Only one per family group Must file an application

Deadline for Filing Affective June 1, 2005 n NO DEADLINE for Filing n March 1 is deadline for receiving homestead n Filing = year round n Receiving = March 1 n

Example A. Purchase home on December 2005 B. File for Homestead on March 15, 2006 Will Receive homestead in what year? 2007 A. Purchase home on February 2006 B. File for Homestead on February 18, 2006 Will Receive homestead in what year? 2007

Example A. Purchase home on December 2005 B. File for Homestead on February 2006 Will Receive homestead in what year? 2006 A. Purchase home on December 2005 B. File for Homestead on October 2006 Will Receive homestead in what year? 2007

Designation of Returns n n 48 -5 -103 (5) Tax Commissioner may give written authority for Tax Assessor to receive returns and/or homestead applications

Eligibility n BOA makes determination of eligibility n Written notice required for denial n Taxpayer may appeal to BOE n 48 -5 -49

How to Figure a Homestead Exemption [(40% * FMV) – 2, 000] * millage rate 100, 000 * 40% = 40, 000 – 2, 000 = 38, 000 *. 02500 = $950. 00

How to Figure Tax Bill [(40% * FMV) – 2, 000] * millage rate Less the HTRG 100, 000 * 40% = 40, 000 – 2, 000 = 38, 000 *. 02500 Total Tax Due = = = $950. 00 $200. 00 $750. 00 HTRG

New Elderly Exemption • • • 10 acres and home 100% exempt State Taxes ONLY IN ADDITION TO 65 years of age

How to Figure New Elderly Over the Age of 65 Net Income of 50, 000 15 acres of land house FMV of house = 150, 000 FMV of land = 75, 000 Millage Rate State =. 25 County = 10. 75 School = 19. 00

How to Figure New Elderly FMV of house = 150, 000 FMV of land = 75, 000 150, 000 x 40% = 60, 000 75, 000 / 15 = 5, 000 an acre x 10 = 50, 000 x 40% = 20, 000 State Exemption = 50, 000 + 2, 000 72, 000 + 8, 000 HTRG

How to Figure New Elderly State Portion 150, 000 + 75, 000 = 225, 000 x 40% = 90, 000 – 72, 000 = 18, 000 x. 00025 = 4. 50 8, 000 x. 00025 = 2. 00 Tax Due = 2. 50

How to Figure New Elderly County Portion 90, 000 – 2, 000 = 88, 000 x. 01075 = 946. 00 8, 000 x. 01075 = 86. 00 Tax Due = 860. 00 School Portion 90, 000 – 2, 000 = 88, 000 x. 019 = 1672. 00 8, 000 x. 019 = 152. 00 Tax Due = 1520. 00

State Code Type of Exemption 2, 000 County School M&O Bond 2, 000 0 S 1 Regular SC Age 65 S 3 Elderly - Age 62 – Net Income less than $10, 000 2, 000 0 10, 000 S 4 Elderly - Age 65 - Net Income less than $10, 000 4, 000 10, 000 S 5 Disabled Veterans (2004 Amount) 50, 000 50, 000 SD Age 65 - 100% Disabled Veteran; Unremarried Surviving Spouse of Disabled Veteran 100% on 10 acres+ 50, 000 50, 000 SS Surviving Spouse of Disabled Veterans 50, 000 50, 000 SE Age 65 - Unremarried Surviving Spouse of US Service Member killed in action 100% on 10 acres+ 50, 000 50, 000 SG Unremarried Surviving Spouse of a Firefighter or Peace Officer killed in the line of duty 100% 100% S 6 Floating - Age 62 – Fed. A. G. I. less than 30, 000 Varying 0 2, 000 0 S 8 Floating - Age 62 - Net Income less than 10, 000 or Fed. A. G. I. less than 30, 000 Varying 0 10, 000 S 9 Floating - Age 65 - Net Income less than 10, 000 or Fed. A. G. I. less than 30, 000 Varying 4, 000 10, 000 100% on 10 acres + 2, 000

Forms Online at: www. etax. dor. ga. gov

Regular (S 1) n $2, 000 exemption from M & O n n State County School Form PL-66—Substitute new form n n n State County School

New - SC n n n O. C. G. A. 48 -5 -48. 3 65 years of age and older on January 1 st 100% exemption on house and 10 acres State ONLY In addition to any other exemption No income information needed

$10, 000 School Exemption n n A. K. A. (S 3) 48 -5 -52 Must be Age 62 on January 1 Must meet requirements for (S 1) $10, 000 Net Income (Applicant and Spouse) n Applies to School M & O and Bond

$4, 000 State and County Exemption n n A. K. A. (S 4) 48 -5 -47 Must be Age 65 on January 1 Must meet requirements for (S 1) $10, 000 Net Income (Applicant and Spouse) n Applies to M & O and Bond on n State County School = 10, 000

Tax Returns n n Use most current tax information May require to prove income yearly General rule—elderly income decreases with age

Definition of GA Net Income n n n 48 -7 -27 Homestead Form may be used as Affidavit of Income Transfer information from Work Form to Homestead Form

Maximum Social Security n n 2006 - $49, 272 2007 - $50, 784 n n should be used when determining the eligibility of any taxpayer seeking the elderly homestead exemptions www. ssa. gov/pressoffice/factsheets/col afacts 2006. htm

Calculation of Net Income Federal AGI From Form 1040: (A) _______ (Adjusted Gross Income) 1040 – Line 35 or 1040 EZ – Line 4 Deductions: Social Security Line 20 b (B)________ Retirement Income Line 15 b (C)________ Disability Income Line 16 b (D)________ Total Deductions: (E)________ Maximum Social Security: (F)____50, 784 _____ (For Taxpayer & Spouse) Reduction of AGI: lesser of line (E) or (F) (G)________ Itemized Deductions or Georgia Standard Deductions: (H)________ 1040 – Line 38 or 500 Line 12 for Itemized Deductions Standard Deductions = 2, 300 for Single/HOH 3, 000 for MFJ 1, 500 for MFS 1, 300 for Each Individual 65 1, 300 for Each Individual Blind Personal Exemptions: (I)________ Number on 1040 – Line 6 d or 500 – Line 7 multiplied by 2, 700 Net Income for Exemption Purposes (J) ________ (Line A minus G minus H minus I) Note: Other Income is derived from adding all other income on the 1040 form other than retirement or social security. Or you may subtract the figures in (B + C + D) from (A).

Calculation Continued Federal AGI From Form 1040: (Adjusted Gross Income) 1040 – Line 35 or 1040 EZ – Line 4 Deductions: Social Security Line 20 b Retirement Income Line 15 b Disability Income Line 16 b Total Deductions: (A) _____$40, 031_____ (B)_____$ 1, 790______ (C)_________ (D)_____$21, 646______ (E)______$23, 436_____

Calculation Continued Total Deductions: (E)____$23, 436______ Maximum Social Security: (F) $50, 784_______ (For Taxpayer & Spouse) Reduction of AGI: lesser of line (E) or (F) (G)____$23, 436______

Calculation Continued Itemized Deductions or Georgia Standard Deductions: (H)_____$3, 000_____ 1040 – Line 38 or 500 Line 12 for Itemized Deductions Standard Deductions = 2, 300 for Single/HOH 3, 000 for MFJ 1, 500 for MFS 1, 300 for Each Individual 65 1, 300 for Each Individual Blind Personal Exemptions: (I)______$5, 400_____ Number on 1040 – Line 6 d or 500 – Line 7 multiplied by 2, 700

Calculation Continued Federal AGI From Form 1040: (Adjusted Gross Income) (A) $40, 031 1040 – Line 35 or 1040 EZ – Line 4 Reduction of AGI: lesser of line (E) or (F) (G) $23, 436 Itemized Deductions or Georgia Standard Deductions: (H) $ 3, 000 Personal Exemptions: (I) $ 5, 400 Net Income for Exemption Purposes (J) $ 8, 195 (Line A minus G minus H minus I)

Application Form SECTION C: 1. COMPLETE THIS SECTION TO DETERMINE ELIGIBILITY OF NET INCOME REQUIREMENT Column 1 A Column 1 B Applicant Only or Spouse Only INCOME FOR YEAR ENDING DECEMBER 31, 20____ Applicant & Spouse if if Tax Return filed Jointly Filed Separately Line 1 -Total Income from Public or Private retirement, disability or pension system Line 2 -Total Income from Social Security Line 3 -Total income from Retirement and Social Security (Line 1 plus Line 2) Line 4 -Maximum Social Security amount (from Tax Receiver)-Cannot exceed Line 3 Line 5 -Adjusted Income (Line 3 less Line 4) Line 6 -Other Income from all sources Line 7 -Adjusted Income (Line 5 plus Line 6) Line 8 -Standard or Itemized Deductions from Georgia Income Tax Return Line 9 -Personal exemption Amount from Georgia Income Tax Return Line 10 -Net Income (Line 7 less Lines 8 & 9) If filing Jointly (Line 10, Column 1 A) Must be < $10, 000 If filing Separately (Total of Line 10, Columns 1 A & 1 B) Must be < $10, 000

Application Form Continued SECTION C: 1. COMPLETE THIS SECTION TO DETERMINE ELIGIBILITY OF NET INCOME REQUIREMENT Column 1 A Column 1 B Applicant Only or Spouse Only INCOME FOR YEAR ENDING DECEMBER 31, 20____ Applicant & Spouse if Tax Return filed Jointly Line 1 -Total Income from Public or Private retirement, disability or pension system Line 2 -Total Income from Social Security Line 3 -Total income from Retirement and Social Security (Line 1 plus Line 2) 21646 1790 23436 if Tax Return Filed Separately

Application Form Continued Column 1 A Applicant Only or Column 1 B Applicant & Spouse if if Tax Return Spouse Only Tax Return filed Jointly Filed Separately Line 4 -Maximum Social Security amount (from Tax Receiver)-Cannot exceed Line 3 Line 5 -Adjusted Income (Line 3 less Line 4) Line 6 -Other Income from all sources Line 7 -Adjusted Income (Line 5 plus Line 6) 49272 0 16595

Application Form Continued Column 1 A Applicant Only or Column 1 B Spouse Only Applicant & Spouse if if Tax Return filed Jointly Filed Separately Line 8 -Standard or Itemized Deductions from Georgia Income Tax Return 3000 Line 9 -Personal exemption Amount from Georgia Income Tax Return 5400 Line 10 -Net Income (Line 7 less Lines 8 & 9) 8195 If filing Jointly (Line 10, Column 1 A) Must be < $10, 000 If filing Separately (Total of Line 10, Columns 1 A & 1 B) Must be < $10, 000

Exercises n Spratts – Federal A. G. I. = 16, 898. 21 n n n Muffin – Federal A. G. I. = 42, 423. 46 n n n Net Income = 57, 929. 31 Not Eligible Blue – Federal A. G. I. = 6, 395. 00 n n n Net Income = 8, 099. 09 Eligible Coles – Federal A. G. I. = 190, 347. 41 n n Net Income = 11, 972. 00 Not Eligible Hubbard – Federal A. G. I. = 74, 530. 15 n n Net Income = 8, 498. 21 Eligible for elderly homestead Net Income = 95. 00 Eligible Contrary – Federal A. G. I. = 12, 386. 14 n n Net Income = 6, 086. 14 Eligible

Disabled Veterans n n $50, 000 Apply to M & O and Bond for n n State County School Qualifications n n n Wartime Veteran – Totally Disabled Form DD #214 Letter from Doctor verifying disability

New - SD n n n 48 -5 -48. 3 Must meet the requirements of S 5 Disabled Veteran. Individuals 65 years of age and older on January 1 100% exemption on House and 10 acres State ONLY In addition to

Surviving Spouse (SS) n n n 48 -5 -52. 1 Spouse killed in an armed conflict May not remarry $50, 000 Applies to M & O and Bonds for n n n State County School

New -- SE n n n Must meet the requirements of SS Surviving Spouse 65 years of age and older 100% exemption on house and 10 acres State ONLY. In addition to

New -- SG n n n 48 -5 -48. 4 Peace Officers and Fire Fighters 100% exemption from state, county, school, municipal, and bond taxes Unremarried surviving spouses In lieu of any existing exemptions

Floating Exemptions n n 62 years of age Appraised value should increase more than $5, 000 to benefit Total household income not to exceed $30, 000 Does not apply to municipal or school taxes.

Tax Deferrals n n 62 years of age Entitled to a homestead Total amount of taxes and interest and all other liens cannot exceed 85% of FMV Gross household income less than $15, 000

Valuation Freeze n n Much like the floating homestead Locally Granted on County and/or School Only Does NOT affect State taxes FMV continues to increase n n Exemption increases yearly Valuation changes when sold

Freeport Exemptions n n Applies to State, County and School Percentage set by Governing Authority n 20%, 40%, 50%, 80% or 100% Between And Percentage of Exemption Allowed March 2 March 31 9/12 or 75 per cent April 1 April 30 8/12 or 67 per cent May 1 May 31 7/12 or 58 per cent On June 1 N/A 6/12 or 50 per cent

Other Exemptions n n n Rehabilitated Historic Property Landmark Historic Property Preferential Agricultural Property Conservation Use Property Environmentally Sensitive Property Tangible Personal Property

Exempt Property 48 -5 -40 – Definitions 48 -5 -41. 1 - Farm Equipment 48 -5 -470. 2 - Autos 48 -1 -8 – Computer software

Exempt Property Class Code E 0 E 1 E 2 E 3 E 4 E 5 E 6 E 7 E 8 E 9 Class Name Non profit homes for the aged Public Property Places of religious worship Property used for charitable purposes Places of religious burial Charitable hospitals Educational Institutions Air and Water Pollution Equipment Farm Products in Hands of Producer Others