How to Claim the Arkansas Homestead Tax Credit
Learn how Arkansas homeowners can secure the homestead tax credit, a direct reduction that lowers the final amount of their property tax bill.
The Arkansas Homestead Tax Credit provides property tax relief to homeowners for their primary residence. This state-sponsored program is designed to lessen the financial burden of property taxes by applying a direct credit to an eligible homeowner’s annual tax bill. The credit is distinct from other property-related tax benefits and is specifically tied to one’s principal place of residence.
Eligibility Requirements for the Homestead Credit
To qualify for the homestead tax credit, an individual must be the owner of record for the property, meaning their name is on the deed. The property must also serve as the owner’s principal place of residence. Eligibility is determined based on the status of the property and its ownership on January 1st of the assessment year.
An individual or a married couple can only claim one homestead credit within the state. If a homeowner moves, they must notify the county assessor to remove the credit from the previous property and apply for it on their new primary residence. Claiming more than one credit can result in penalties, including the repayment of the credit received plus a 100% penalty. The credit can also apply to a homestead property owned by a trust.
Homeowners who are 65 or older or are disabled by Social Security Administration standards may be eligible for an additional benefit. This separate program freezes the assessed value of their property, preventing it from increasing due to reappraisals, though the actual tax amount can still change if millage rates are adjusted. This benefit is distinct from the standard homestead credit and requires its own application and proof of age or disability.
Credit Amount and Calculation
The homestead tax credit provides a direct, dollar-for-dollar reduction of a homeowner’s property tax liability up to a maximum of $600 per year. This amount is subtracted from the total property tax bill that is calculated by the county. For example, if a homeowner’s tax bill is $1,000, the application of the full credit would reduce their final payment to $400.
This is a tax credit, not a reduction in the property’s assessed value. The county assessor first determines the property’s market value and then its assessed value. The tax bill is calculated by multiplying this assessed value by the local millage rate. The homestead credit is applied after this calculation is complete, directly lowering the amount of tax owed.
The actual credit received cannot exceed the total tax liability. If a homeowner’s total property tax bill is less than $600, the credit will only cover the amount of the bill, reducing it to zero.
Information and Documentation Needed to Claim the Credit
Before applying for the homestead tax credit, homeowners need to gather specific information. The primary piece of information is the property’s parcel number, which can be found on a previous property tax bill, the property deed, or the county assessor’s website.
The application form itself is the main document required. This form can be obtained directly from the local County Assessor’s office or downloaded from their website. When completing the form, the owner will need to provide their full name as it appears on the property record, the physical address of the homestead, and the parcel number.
For those also applying for the age or disability freeze, additional documentation such as a driver’s license, birth certificate, or a disability award letter from the Social Security Administration will be necessary to prove eligibility.
How to Claim the Credit
Once the application form is completed, it must be submitted to the local County Assessor’s office. This is the agency responsible for managing property assessments and exemptions. The statewide deadline for submitting the application is October 15th of the year for which the credit is being claimed.
After the initial application is filed and approved, the homestead credit renews automatically in subsequent years. The homeowner does not need to reapply annually as long as their eligibility status remains unchanged.
It is the homeowner’s responsibility to inform the assessor’s office of any changes that would affect their eligibility. This includes events such as selling the property, moving to a new principal residence, or converting the property into a rental. Failure to report these changes in a timely manner can lead to the improper receipt of the credit and potential penalties.