DRS: IP 96(9),Q & A Property Tax Credit

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

450 Columbus Blvd
Hartford CT 06103
 
 
 
 
 
 

 
 

This Informational Publication has been obsoleted by IP 97(9)

IP 96(9)

Q & A Property Tax Credit


WHAT IS THE PROPERTY TAX CREDIT?

If you are a Connecticut resident and you own your primary residence or a motor vehicle, you may be eligible to claim a credit against your 1996 Connecticut income tax liability for property taxes paid to a Connecticut political subdivision. The credit is limited to whichever of the following amounts is least:

  • $100,

    or

  • the amount of property tax, if any, paid by you to a Connecticut political subdivision during 1996 and relating to property that was on that Connecticut political subdivision's October 1, 1995 grand list,

    or

  • your 1996 Connecticut income tax liability as reported on your 1996 Form CT-1040, Line 10, or your 1996 Form CT-1040EZ, Line 4.

IF I DID NOT PAY ANY PROPERTY TAX TO A CONNECTICUT POLITICAL SUBDIVISION IN 1996, AM I ELIGIBLE FOR THE CREDIT?

No.


IF I HAD NO CONNECTICUT INCOME TAX LIABILITY IN 1996, AM I ELIGIBLE FOR THE CREDIT?

No. If your Connecticut income tax liability as reported on your 1996 Form CT-1040, Line 10, or Form CT-1040EZ, Line 4, is zero, you are not eligible for a credit. The credit is not refundable and may not be carried forward.


ARE NONRESIDENTS OR PART-YEAR RESIDENTS ELIGIBLE TO CLAIM THE CREDIT?

No. Only resident individuals are eligible. Resident trusts or resident estates are not eligible, either.


WHAT IS MY PRIMARY RESIDENCE?

Your primary residence is your principal place of abode, e.g., a house, an apartment, or a condominium. To qualify for the credit, you must own your primary residence; that is, the title to your primary residence must be in your name (or, if you along with another person or persons own the residence, the title must be in your names) and your primary residence must be located within Connecticut. If your primary residence is a house, condominium unit or apartment that you rent from someone else, you are not eligible to claim the property tax credit (even if your landlord bills you for the property taxes on the house, unit or apartment). Finally, you will not be eligible to claim the property tax credit for property taxes that you pay on a second home, vacation home or investment property.


WHAT IS A PRIVATELY OWNED MOTOR VEHICLE?

It is a motor vehicle, as defined by Conn. Gen. Stat. 14-1, and that includes cars, motorcycles, trucks, and any other vehicle that is suitable for operation on a highway and that could be registered for motor vehicle registration purposes, whether or not the vehicle is so registered. For example, a motor home that could be registered for motor vehicle purposes (whether or not it is so registered) and that is suitable for operation on a highway is a motor vehicle. An antique car that could be registered for motor vehicle purposes (whether or not it is so registered) and that is suitable for operation on a highway is a motor vehicle. Also, the motor vehicle must be directly owned by you; that is, the title to the motor vehicle must be in your name (or, if you along with another person or persons own the vehicle, the title must be in your names). If you lease a motor vehicle from a leasing company or anyone else, you are not eligible to claim the property tax credit (even if the leasing company bills you for the property taxes on the vehicle or you pay the property taxes directly to the town or city). If the title to the motor vehicle is in the name of a business, even if you are the sole proprietor of that business, you are not eligible to claim the property tax credit.


WHAT IS A CONNECTICUT POLITICAL SUBDIVISION?

It is a Connecticut city or town or any tax district in a Connecticut city or town.


HOW DO I KNOW IF THE PROPERTY TAXES THAT I PAID RELATE TO PROPERTY ON THE OCTOBER 1, 1995 GRAND LIST?

Property taxes that first became due and payable on July 1, 1996 relate to property on the October 1, 1995 grand list and are eligible for the credit. Property taxes that first became due and payable prior to July 1, 1996 were on an earlier grand list, and you are not eligible for the property tax credit even if you paid those property taxes during 1996. For example, if, during 1996, you paid $50 of property taxes due and payable on January 1, 1996 to a Connecticut political subdivision and $75 of property taxes due and payable on July 1, 1996, you will be eligible to claim a property tax credit of up to $75. If, during 1996, you also paid, in addition to the other property tax payments, $75 of property taxes due and payable on January 1, 1997, you will be eligible for a property tax credit of up to $100 on your 1996 Connecticut income tax return, but you will not be eligible to claim a property tax credit on your 1997 Connecticut income tax return for the property taxes due and payable on January 1, 1997 that you paid during 1996.


IF I PAID MY PROPERTY TAXES IN 1997, MAY I CLAIM PROPERTY TAX CREDIT ON MY 1996 CONNECTICUT INCOME TAX RETURN?

No. The property tax credit is limited to property tax paid during 1996 by you to a Connecticut political subdivision and relating to property that was on that Connecticut political subdivision's October 1, 1995 grand list.


ARE PROPERTY TAXES PAID ON THE SUPPLEMENT TO THE OCTOBER 1, 1995 GRAND LIST ELIGIBLE FOR PROPERTY TAX CREDIT?

Yes, provided property tax was paid during 1996 by you to a Connecticut political subdivision.


IF I AM MARRIED, HOW DOES MY INCOME TAX FILING STATUS AFFECT THE AMOUNT OF THE PROPERTY TAX CREDIT?

If you and your spouse are filing a joint federal income tax return, you and your spouse are required to file a joint Connecticut income tax return. The credit on your joint Connecticut income tax return may not exceed $100. If you, your spouse or both of you (whether as joint tenants with right of survivorship or as tenants in common) own the primary residence or privately owned motor vehicle on a Connecticut political subdivision's October 1, 1995 grand list, you are eligible to claim the property tax credit on your 1996 Connecticut income tax return as long as you, your spouse or both of you paid property taxes to the Connecticut political subdivision on such property during 1996.

If you and your spouse are each filing a separate federal income tax return, you and your spouse are each required to file a separate Connecticut income tax return. The credit on your separate Connecticut income tax return may not exceed $100 (and the credit on your spouse's separate Connecticut income tax return may not exceed $100). If you do not own the primary residence or privately owned motor vehicle, you may not claim the credit for property taxes even if you paid the property taxes. (Similarly, if your spouse does not own the primary residence or privately owned motor vehicle, your spouse may not claim the credit for property taxes even if your spouse paid the property taxes.) If you together with your spouse own your primary residence or motor vehicle, see the next question.


WHAT IF I, TOGETHER WITH ANOTHER PERSON OR PERSONS, OWN A PRIMARY RESIDENCE OR PRIVATELY OWNED MOTOR VEHICLE?

If the property is joint tenancy (with right of survivorship) property, each joint tenant is liable for the full amount of the property tax and is eligible to claim a property tax credit of up to $100 if that person paid tax on the property at least equaling the credit claimed.

For example, you and your sister own a motor vehicle as joint tenants with a right of survivorship. You and your sister receive a property tax bill for $400 first due on July 1, 1996 from a Connecticut municipality on that vehicle. You paid $325 of that bill during 1996, and your sister paid $75 of that bill during 1996. You may claim a property tax credit of $100 or the amount of your Connecticut income tax liability as reported on your 1996 Form CT-1040, Line 10, or your 1996 Form CT-1040EZ, Line 4, whichever is less. Your sister may claim a property tax credit of $75 or the amount of her Connecticut income tax liability as reported on her 1996 Form CT-1040, Line 10, or her 1996 Form CT-1040EZ, Line 4, whichever is less.

If the property is tenancy in common property, each tenant in common is liable for the property taxes but only to the extent of that person's interest in the property and is eligible to claim property tax credit of up to $100 if that person paid tax on the property at least equaling the credit claimed (but not exceeding that person's liability for the property tax).

For example, you and your uncle, as tenants in common, own a motor vehicle. You own an undivided one-half interest in the motor vehicle, and your uncle owns an undivided one-half interest in the motor vehicle. You and your uncle receive a property tax bill for $100 first due on July 1, 1996 from a Connecticut municipality on that vehicle. You paid $75 of that bill during 1996, and your uncle paid $25 of that bill during 1996. You may claim a property tax credit of $50 or the amount of your Connecticut income tax liability as reported on your 1996 Form CT-1040, Line 10, or your 1996 Form CT-1040EZ, Line 4, whichever is less. Your uncle may claim a property tax credit of $25 or the amount of his Connecticut income tax liability as reported on his 1996 Form CT-1040, Line 10, or his 1996 Form CT-1040EZ, Line 4, whichever is less.


IF I PAID MORE THAN $100 OF PROPERTY TAXES DURING 1996 TO A CONNECTICUT POLITICAL SUBDIVISION OR MY CONNECTICUT INCOME TAX LIABILITY WAS LESS THAN $100, AM I ENTITLED TO A REFUND OR TO CARRY FORWARD THE EXCESS TO MY 1997 CONNECTICUT INCOME TAX RETURN?

No. The maximum credit allowed is $100, and any excess may not be carried forward or refunded.


MAY I CLAIM PROPERTY TAX CREDIT ON MORE THAN ONE PRIVATELY OWNED MOTOR VEHICLE?

Yes, provided all the conditions set out in this Informational Publication for claiming the credit for tax paid on one motor vehicle are met. However, the total credit claimed may not exceed $100, or your 1996 Connecticut income tax liability as reported on your 1996 Form CT-1040, Line 10, or your 1996 Form CT-1040EZ, Line 4, whichever is less.


MAY I CLAIM THE CREDIT FOR PROPERTY TAXES THAT I PAID ON SOMEONE ELSE'S PRIMARY RESIDENCE OR PRIVATELY OWNED MOTOR VEHICLE?

No. Only the owner of the property is eligible to claim the credit. If the owner does not pay the property taxes himself or herself, no one is eligible to claim the credit.


WHAT RECORDS SHOULD I RETAIN TO SUPPORT MY PROPERTY TAX CREDIT?

A receipted bill from your town, your cancelled check showing property tax paid or a federal Form 1098 from your bank or mortgage company (if property tax is included in your monthly mortgage payments) will be sufficient to support your property tax credit. Do not attach these records to your Connecticut income tax return. These records should be retained by you for at least three years from the due date (or, if you request an extension of time to file your return, the extended due date) of your return.


WHAT IF I AM NOT A CALENDAR YEAR TAXPAYER FOR FEDERAL INCOME TAX PURPOSES?

Virtually all individuals use the calendar year as their taxable year for federal income tax purposes (and, therefore, for Connecticut income tax purposes), but in the unlikely event that you use a fiscal year (other than the calendar year) as your taxable year for federal income tax purposes (and, therefore, for Connecticut income tax purposes), you are eligible to claim the credit for property taxes that first became due and payable on or after July 1, 1996, and that you paid during your taxable year beginning during 1996. Wherever this Information Publication refers to "1996", substitute "your taxable year beginning during 1996".


WHAT IF I AM NOT A CASH BASIS TAXPAYER FOR FEDERAL INCOME TAX PURPOSES?

Virtually all individuals are cash basis taxpayers for federal income tax purposes (and, therefore, for Connecticut income tax purposes), but in the unlikely event that you are an accrual basis (rather than a cash basis) taxpayer for federal income tax purposes (and, therefore, for Connecticut income tax purposes), you are eligible to claim the credit for property taxes that you are liable for (because you own the property on which those taxes are assessed) and that first became due and payable on or after July 1, 1996, but on or before December 31, 1996.


EFFECT OF THIS DOCUMENT: An Informational Publication is a document that addresses frequently-asked questions about a current Department position, policy or practice, usually in a less technical, question-and-answer format.


EFFECT ON OTHER DOCUMENTS: None affected.


FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24 hours a day by choosing Option 3 on your touch tone telephone.

Electronic Delivery Options: You can also obtain tax forms and publications 24 hours a day from our site on the World Wide Web at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.


IP 96(9)
Income tax
Property tax credit
Issued: 1/9/97