Computing Disposable Income
The maximum amount of annual income you may receive to qualify for the exemption is $40,000. The disposable income you receive during the year in which you apply determines your eligibility. Disposable income includes all sources, whether or not they are taxable for federal income tax purposes. Losses and depreciation may not be deducted. Some of the most common sources of income include:
- Wages, salaries and tips
- Social Security benefits
- Railroad retirement benefits
- Pension and annuity receipts, including retirement bonds, distributions from individual retirement accounts and distributions from Keogh plans
- An annuity is a payment of a fixed sum of money received at regular intervals. Some examples of annuity payments include unemployment compensation, disability payments and welfare receipts (excluding amounts received for the care of dependent children)
- Interest and dividend receipts
- Business income, depreciation and business losses may not be deducted
- Rental income, depreciation and rental losses may not be deducted
- Capital gains
Deductions From Income
To determine your disposable income, you may take deductions for the following:
- Capital gains you receive from the sale of your primary residence, if the gain is reinvested in a replacement primary residence
- Non-reimbursed amounts you pay for your spouse, yourself or co-tenant to live in a licensed nursing home, assisted living or adult care facility
- Non-reimbursed amounts paid for prescription drugs for yourself, your spouse or co-tenant
- Non-reimbursed amounts you pay for goods and services that allow you, your spouse or co-tenant to receive in-home care. The care received must be similar to the care provided by a licensed nursing home, assisted living or adult care facility
- In-home medical treatment such as physical therapy received in the home, Meals on Wheels (or similar meal delivery service) and personal care. Personal care includes assistance with preparing meals, getting dressed, eating, taking medication or area of personal hygiene
- Special furniture and equipment, such as wheelchairs, hospital beds and oxygen
Category C - $35,001 to $40,000
When your annual income for the application year is $40,000 or less, your home will be exempt from all excess or special levies except the Emergency Medical Services Levy. Excess or special levies are in addition to regular levies. They require voter approval and provide money for a specific purpose, such as school bonds and maintenance and operation levies.
Category B - $30,001 to $35,000
When your household income is between $30,001 and $35,000 you are exempt from regular levies, except the Emergency Medical Services Levy, for $50,000 or 35% of the assessed value, whichever is greater, not to exceed $70,000 of assessed value.
Category A - $30,000 or Less
When your household income is $30,000 or less, you are exempt from regular levies, except the Emergency Medical Services Levy, on the first $60,000 or 60% of your home's assessed value, whichever is greater.
Death of the Applicant
The exemption is canceled at the date of death. The taxes will be recalculated without the exemption. Your surviving spouse may continue to receive the exemption if he or she is at least 57 years old and meets all the other eligibility requirements.