Editor’s note: This is the final story in a series concerning
the ramifications of a tax reform proposal known as the Taxpayer
Relief Act, or “Act 1.”

Long before a school tax referendum goes before voters May 15,
the tax reform plan known as Act 1 has started the process of
expanding tax relief to Pennsylvania’s senior citizens.

One part of the Taxpayer Relief Act has significantly expanded
the income guidelines for the existing Senior Citizens Property Tax
and Rent Rebate program.

Starting this year, senior citizens who make as much as $35,000
may be eligible to receive a rebate on a portion of their 2006
property taxes.

This program was expanded by Act 1 but has its own set of
guidelines and requirements. And, unlike Act 1, which has the
capacity to lower property tax, this measure actually pays out
rebates to individual homeowners and renters.

Here’s some things you need to know to determine your
eligibility –

Age limits

There are three classes of taxpayers who might be able to claim
the tax or rent rebate:

* If you or your spouse was at least 65 during the year in which
property taxes or rent were due and payable.

* If you are a widow or widower and at least 50 years of age
during that time frame.

* If you are permanently disabled and 18 years of age or older
during that time frame.

Income guidelines

The maximum income for eligibility has been increased from
$15,000 to $35,000 for property owners only. It remains at $15,000
for renters.

For property taxpayers, household income under $8,000 could
provide a benefit of $650; income from $8,001-$15,000, a benefit of
$500; from $15,001 to $18,000, a benefit of $300; and from $18,001
to $35,000, a benefit of $250.

Renters seeking a rebate are eligible for a $650 benefit if the
household income is under $8,000; and $500 if income is between
$8,001 and $15,000. Rent does not include subsidies provided by the
government. Those on public assistance are not eligible for the
program.

What is income?

For the tax and rent rebate program, the definition of “income”
differs substantially from the “earned income” used to determine
tax liability as part of the May 15 referendum on the primary
election ballot.

This tax and definition is far more complex and
all-encompassing.

Income includes three components:

* Salaries, wages, bonuses, commissions, income from
self-employment, alimony, support money, cash public assistance and
relief;

* The gross amount of any pensions or annuities, including
railroad retirement benefits for calendar years prior to 1999 and
50 percent of railroad benefits for calendar years 1999 and
thereafter;

* All benefits received under the Social Security Act, except
Medicare benefits, for calendar years prior to 1999 and 50 percent
of all benefits received, except Medicare, for calendar years 1999
and thereafter;

* All benefits received under state unemployment insurance laws
and veterans’ disability payments;

* Interest received from the federal or any state
government;

* Realized capital gains and rentals;

* Workers’ compensation;

* The gross amount of loss-of-time insurance benefits, life
insurance benefits and proceeds, except the first $5,000 of the
total death benefit;

* Gifts of cash or property, other than transfers by gift
between members of a household, in excess of a total value of
$300.

And this, too: The maximum amount of property tax or rent rebate
in lieu of property taxes payable cannot exceed the lesser of 1)
the amount of a claim; 2) the amount of real property taxes
actually paid; or 3) 20 percent of gross rent actually paid.

Filing a claim

The rules are fairly simple.

Anyone wishing to file a claim must do so to the state
Department of Revenue on or before June 30 of the year following
the end of the calendar year in which the property taxes or rent
was due. In other words, claimants would have to file on or before
June 30, 2007, for property taxes or rent due or payable in
calendar year 2006. A claim can be filed after June 30 and before
Dec. 31, but it will only be paid as long as funds are available to
pay the benefits.

Forms and information are available online through the State
Department of Revenue’s Web site. Information assistance is also
available through the regional office of the Pennsylvania
Department of Revenue, 448 W. 11th St., in Erie.