- What is the Senior Citizens’ Tax Deferral program?
- The Senior Citizens’ Tax Deferral is a program that provides tax relief by allowing qualified senior citizens to defer all or part of the property taxes on their personal residence. It’s a form of a loan with a six percent interest rate, which must be repaid after the taxpayer’s death, or at the time the property is sold.
- The deferral is similar to a loan against the property’s market value. Deferred amounts are “borrowed” from the State of Illinois, who pays the tax bill. To ensure repayment, a six percent simple interest rate is charged on the deferred amounts and a lien is filed on the property. The six percent interest is charged for each year that the deferred amount is carried. For example, a $2,000 tax amount deferred for one year would equal interest of $120. If not paid off in the first year, the interest would grow to $240 at the end of the second year, $360 at the end of the third year, and so on.
- When can I sign up for the program?
- Forms are available at the DeKalb County Treasurer’s office after January 1, 2013. Forms must be returned to the County Treasurer’s office by March 1, 2013.
- How do I apply for this program?
- You are required to file two forms with your County Treasurer annually on or before March 1, 2013. These forms are available at the DeKalb County Treasurer’s office after January 1, 2013. One form (IL-1017 TD) asks for the basic information on your income and property. It also requires any joint owners to agree to and sign the tax deferral forms. You must provide the County Treasurer evidence of adequate insurance on the property. The second form (IL-1018 TD) is the agreement for the tax deferral which sets out the conditions of the deferral, including the maximum amount which can be deferred, the interest rate to be charged, and the arrangements for paying back the “loan”.
- Who is eligible to participate in the program?
- Anyone who is 65 years of age or older by June 1, 2013.
- Anyone who has a total household income of no greater than $55,000.
- Anyone who has lived in the property or other qualifying property for at least three years (except for any periods which you may have temporarily resided in a nursing or sheltered care home)
- Anyone who owns the property, which must be exclusively for residential purposes. This includes a condominium or a dwelling unit in a multi-dwelling building that is owned and operated as a cooperative. Joint ownership is limited to you and your spouse. You may be required by the County Treasurer to provide proof of ownership, such as a copy of the deed. If the homestead is in a land trust, the trustee must sign the application.
- Anyone who has no delinquent taxes or special assessments on the property.
- You must be able to provide adequate evidence that the qualifying property on which the taxes are to be deferred is insured against fire or casualty loss for at least the total amount of taxes that will be deferred.
- What type of property is considered “qualifying property”?
Qualifying property is a homestead that:
- A taxpayer, or a taxpayer and spouse, own in fee simple or that is being purchased in fee simple under a recorded instrument of sale,
- Is not an income-producing property,
- Is not subject to a lien for unpaid property taxes and special assessments.
Qualifying property includes both land and buildings such as a:
- Single-family residence,
- Condominium, or
- Dwelling unit in a multi-dwelling building that is owned and operated as a cooperative.
Deferrals may continue even if the property is unoccupied because the taxpayer is temporarily residing, for not more than one year, in a nursing or sheltered care home.
- What is a qualifying trust?
- If a taxpayer is applying for the Tax Deferral Program for the first time in 2013 (for the
2012 tax year) and thereafter, and the property is being held in a trust, the trust must be an
Illinois Land Trust with the deferral applicants being the sole beneficiaries of the trust.
- If the deferral applicant is single, the applicant must be the sole beneficiary of the trust in order for the trust to be considered a qualifying trust.
- The same is true for married applicants, although one spouse may be named as the first-tier beneficiary and the other spouse may be named as the second-tier beneficiary under the trust agreement.
- The application must be filed by the beneficiary of the trust who meets all eligibility requirements and obtains the approval of the trustee to enter into the tax deferral and recovery agreement.
- Is the property tax bill actually paid when it is due?
- Yes. If a taxpayer meets the program qualifications, the county treasurer/collector sends a copy of the property tax bill to the Illinois Department of Revenue. The department then sends the tax bill payment to the county treasurer/collector.
- How much can I defer?
- If you qualify, you may defer all or part of your real estate tax bill (not to exceed $5,000.00) for the current tax year. The combined total of taxes deferred for this year and any prior or subsequent years, including interest, cannot exceed 80% of the equity interest in your property.
- What is included in household income?
Some examples of income that must be included in your household income are listed below:
-Black Lung benefits
-Cash assistance from Human Services and other governmental cash public assistance
-Cash winnings from such sources as raffles and lotteries
-Civil Service benefits
-Damages awarded in a lawsuit for non-physical injury or sickness
-Interest received on life insurance policies
-Lump sum Social Security payments
-Miscellaneous income, such as from rummage sales, recycling aluminum, or baby-sitting
-Monthly insurance benefits
-Pension and IRA benefits (federally taxable portion only)
-Railroad Retirement benefits (including Medicare deductions)
-Senior Care rebate (only if you took an itemized deduction for health insurance in the prior year)
-Social Security income (including Medicare deductions)
-Supplemental Security Income (SSI) benefits
-Veteran’s benefits (federally taxable portion only)
-Wages, salaries, and tips from work
-Worker’s Compensation income
-Worker’s Occupational Diseases Act income
- Can a taxpayer defer subsequent bills for property taxes and special assessments?
- Yes. A taxpayer must apply each year at the county collector’s office for a deferral of the property taxes and special assessments payable in that year.
- Can payments be made for property taxes and special assessments that are deferred before the property is sold or the property owner dies?
- Yes. Any portion of the deferral can be paid at any time by the taxpayer, that taxpayer’s spouse, or, if the taxpayer does not object, by other qualifying relatives, heirs, or parties that have a legal or equitable interest in the property.
Contact the county collector for the exact settlement amount. Payments must be submitted to the County Treasurer’s office.
- Do the taxes eventually have to be paid?
- Yes—This program defers taxes; it doesn’t eliminate the tax liability. The taxes become due within one year of the taxpayer’s death, or when the real estate is sold. A surviving spouse who is at least 55 years of age within six months of the taxpayer’s death can continue the tax deferral.