House passes more tax breaks

JEFFERSON CITY, Mo. -- First the state granted an income tax break to middle- and low-income seniors and the disabled. Then last year, it enacted a property tax break for seniors and the disabled confronted by rising home values.

On Thursday, the House passed legislation that would provide a third way for the disabled and seniors to save on their taxes: an income tax credit that could offset part of their property taxes.

Sponsoring Rep. Kathlyn Fares said more protections are needed for seniors who are being "priced out of their homes" by rising property values that in turn hike their taxes.

"They are having to make those decisions between food and medicine and giving up a home, and they should not be asked to do that," Fares, R-Webster Groves, told her colleagues.

The House passed her legislation 157-0, sending it to the Senate, which has just two weeks to consider it before the May 13 end of the legislative session.

The proposed tax break would apply to the disabled and people age 65 and older who have lived in their homes for at least 20 years. If their property taxes consumed at least 10 percent of their household incomes, they could receive state income tax credits equal to half the property taxes they paid.

Last year's law capped the annual increases in property taxes for the disabled and seniors whose incomes are less than $70,000 annually. If their taxes rise more than 5 percent after reassessments, which occur every other year, or more than 2.5 percent in non-assessment years, then they can apply to the state for a credit equal to the amount of the increase above the cap. The credit can be applied against their next year's property taxes.

A separate, longtime state law grants an income tax credit of up to $750 for individuals earning less than $25,000 annually who are disabled or at least age 65. For married couples, that income threshold is $27,000.

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Tax break bill is HB649.

On the Net:

Legislature: http://www.moga.state.mo.us