Wisconsin Property Tax Exemption for Seniors

Many seniors living on a fixed income look for ways to reduce their property tax obligations. While individuals often search for a “property tax exemption” in Wisconsin, the state’s primary relief mechanism for eligible residents is a tax credit. This program, known as the Homestead Credit, provides direct relief to homeowners and renters based on their income and property tax burden. Understanding the distinction between an exemption, which removes a property from the tax rolls, and a credit, which reduces the amount of tax owed or results in a refund, is an important first step. Beyond this credit, the state also offers a loan program designed to help seniors defer their property tax payments.

The Wisconsin Homestead Credit

The Wisconsin Homestead Credit is a refundable credit designed to alleviate the property tax burden for lower-income households. This means that even if an individual owes no state income tax, they can still receive a payment from the state if they qualify. The program is available to both homeowners and renters, with a portion of rent paid being treated as property taxes for the purpose of the calculation.

Eligibility for the Homestead Credit hinges on several specific criteria that must be met for the entire calendar year. A claimant must be a legal Wisconsin resident for the full year and be at least 18 years old. A primary component of eligibility is household income, which includes nearly all taxable and nontaxable money received by the claimant and their spouse. This encompasses wages, social security benefits, pensions, and unemployment compensation, and it cannot exceed a specific threshold set by the state.

To qualify, the individual must have owned and occupied their Wisconsin home or rented a qualifying residence during the tax year. There are also specific disqualifying factors. For instance, an individual cannot claim the credit if they are residing in a nursing home and receiving Title XIX medical assistance or if they are claiming a property tax exemption on a different home for the same year.

The Property Tax Deferral Loan Program

As an alternative to the Homestead Credit, Wisconsin offers the Property Tax Deferral Loan Program. This program is a loan that must be repaid with interest. The state pays the property taxes directly to the municipality on behalf of the homeowner, and in return, a lien is placed on the property. This allows seniors to convert their home equity into cash to cover their tax bills.

The eligibility requirements for this loan are distinct from the Homestead Credit and are specifically targeted toward older homeowners. An applicant must be at least 65 years of age, and if the property is co-owned, the other owner must be at least 60. This age requirement for a co-owning spouse is waived if either the applicant or their spouse is permanently disabled. The property must be the owner’s primary residence in Wisconsin, and the applicant’s prior year household income cannot have exceeded $20,000.

A factor for qualification is the amount of equity in the home. The total amount of outstanding liens against the property, including the potential property tax deferral loan, cannot exceed a certain percentage of the home’s assessed value. The maximum annual loan amount is $3,525, and the loan becomes due when the home is sold, the owner passes away, or no longer lives in the residence.

Information and Documents Needed to Apply

For the Homestead Credit, applicants need the Social Security numbers for themselves and their spouse, comprehensive figures for their total household income, and the amount of property taxes paid during the year. The primary application form is Wisconsin Schedule H (or the simpler Schedule H-EZ), which can be found on the Wisconsin Department of Revenue’s website.

To complete Schedule H, homeowners will need a copy of their property tax bill for the relevant year to accurately report the net tax paid. Renters must have a completed Rent Certificate, officially known as Form LC-100, which must be signed by their landlord. This form verifies the amount of rent paid and the portion that can be allocated as property taxes.

For the Property Tax Deferral Loan Program, the required documentation is different. Applicants must provide proof of age, such as a driver’s license or birth certificate, along with verification of their household income through documents like federal tax returns or social security benefit statements. It is also necessary to provide details of any existing mortgages or other liens currently on the property. The application package can be obtained from the Wisconsin Housing and Economic Development Authority (WHEDA), and a copy of the current year’s property tax bill is also a required part of the submission.

The Application Process

For the Homestead Credit, there are two primary methods for filing. The most common method is to file electronically along with a Wisconsin income tax return, Form 1. Approved tax preparation software will integrate Schedule H or H-EZ into the filing process, automatically calculating the credit and including it with the overall tax return.

Alternatively, applicants can file a paper return by mail. This involves attaching the completed Schedule H or H-EZ to the printed Form 1 and mailing it. For the Property Tax Deferral Loan Program, the application and all supporting documents must be filed with the Wisconsin Housing and Economic Development Authority (WHEDA).

For the Homestead Credit, the calculated amount will either reduce the income tax owed or be issued as a refund as part of the standard income tax refund process. For the Deferral Loan, if approved, the state will pay the property taxes directly to the local treasurer, and a lien is placed on the property.