Money, Taxes & The Law

If you’re 65-years or older, and you’re not taking advantage of the Homestead Exemption, you may be losing money. According to a report by the local CBS affiliate in Huntsville, Alabama, the information you need for making your claim is available online, but it apparently is not easy to find.

Madison County Tax Assessor, Cliff Mann, told the TV station that his office is, ‘working to improve the awareness in the community of this issue.’

A homestead exemption is a tax break you may file if you own and live in a single-family residence. The home must be your primary residence as of October 1 of the tax year for which you are filing.

A homestead exemption must be claimed; exemptions are not automatic. If you make any changes to your deed, you may need to reclaim your exemption.

If you are 65 years or older, you’re entitled to an exemption from State property taxes. If you are in this age category, or you have retired due to total and permanent disability, you may be entitled to additional exemptions based on your income.

While the Homestead Exemption is available to all Alabama residents who own a home, there are three specific exemptions available to residents who are 65 years old or older.

Exemption 2 applies if you have an annual adjusted gross income of $12-thousand or less as filed on your most recent State Income Tax Return. This exemption is for the total assessed value of state taxes and up to $5-thousand in assessed value on your primary residence.

Exemption 3 is for Alabama residents with net taxable income of the combined taxpayer and spouse of $12-thousand on your Federal Income Tax Return. If you are permanently disabled, no matter your income, you can qualify, also.

Exemption 4 is for Alabama residents 65 or older regardless of their income.

If you prepare your own taxes, and you have questions regarding the Homestead Exemption, contact your county tax assessor’s office. This all seems yet another reason why we must simplify the overly-complicated behemoth that is our tax code.

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