HOMESTEAD REFUND and PROPERTY TAX RELIEF CLAIM

HOMESTEAD REFUND and PROPERTY TAX RELIEF CLAIM

Kansas STTC Training - TY2018
K40 vs K40H/PT Taxpayer Claimant TP, SP, Dependents Household FAGI, AGI, Earned Household Income Taxable, Exempt Included, Excluded Income Tax owed Property tax refund PT paid in TY PT assessed for CY Kansas STTC Training - TY2018

Two Property tax programs
Homestead claim allows a rebate of a portion of the property taxes paid on a Kansas resident’s homestead. (A homestead is the house, mobile home or other dwelling subject to property tax that you own and occupy as a residence.) Maximum is $700. Property Tax Relief claim (Safe Senior) allows a refund of property tax for low income senior citizens that own their home. The refund is 75% of the property taxes actually and timely paid on real or personal property used as their principal residence. Kansas STTC Training - TY2018

Homestead vs Property Tax Relief
HS PT Minimum Age (all year) 55 65 Max Household Income $35,000 $19,800 Social Security Included 50% 100% Allows for delinquent property tax payments Yes No Disability Qualifies Refund for renters Max Refund $700 75% of PT 2017 HS less restrictive than SS Age Income Disability qualifies Delinquent property tax But – SS can return more if qualifications met Up to $1500 on a typical $2000 property tax Kansas STTC Training - TY2018

Homestead Qualifiers Must be Kansas resident entire year, and one of the following: Age 55 or more all year , OR Blind or totally and permanently disabled entire year , OR Have a Dependent who lived with taxpayer entire year born before Jan 1, 2018 under 18 entire year Kansas STTC Training - TY2018

Homestead Qualifiers Maximum Household Income must be less than $35,000 including ½ of SS. Maximum refund is $700 Must own your home and live in it. Maximum home value is $350,000 Kansas STTC Training - TY2018

PT Qualifiers Must be a Kansas resident entire year and all of the following: Age 65 or more entire year, AND Own the home and live in it, AND Max household income = $19,800, AND (including ALL of Social Security) Max property value = $350,000, AND Must not be delinquent on their property taxes Kansas STTC Training - TY2018

Military Disability Eligibility for Homestead
Disabled Veterans KS resident 100% of the year Honorably discharged from active duty Certified to have 50% or more permanent disability: Sustained through military action or due to an accident while on active duty or resulting from a disease contracted while on active duty Kansas STTC Training - TY2018

Military Disability Eligibility for Homestead (cont)
Surviving Spouses of Disabled Veterans – would continue to remain eligible until such time as they remarry. Surviving Spouses of Active Duty Military who died in line of duty - would continue to remain eligible until such time as they remarry. Kansas STTC Training - TY2018

Household defined A Household includes all adults who occupy the homestead, even if they are not dependents. This means at the same address. The only exception is if the minor’s name is on the home title. Kansas STTC Training - TY2018

Household Income vs. Excluded Income
See K-40H Instruction book, Page 2 Kansas STTC Training - TY2018

Disability for Homestead & PT
Filing Homestead or PT as disabled is a very advantageous filing status Proof of Disability must be on file with KDOR to file SSA Disability Determination letter OR Physician’s statement on SCH DIS Must have been disabled before 2018 Kansas STTC Training - TY2018

If this is the first year filing the Homestead claim with disability, then taxpayer must submit a copy of the determination letter or SCH DIS. We can fax this for them if they have it with them Once proof is on file, there is no need to send again. Kansas STTC Training - TY2018

SSI – Supplemental Security Income Taxpayer will not have an SSA-1099 and this will not be entered on the 1040. If this payment is NOT related to Disability, you manually enter as Household Income. TaxSlayer will exclude 50%. If this payment IS related to Disability, you may exclude 100% from Household Income. Kansas STTC Training - TY2018

SSDI – Social Security Disability Insurance Based on prior work under S.S. Paid to disabled or blind workers, widows or adults disabled since childhood They receive SSA-1099, just like retirees, with no special indication that it is SSDI Kansas STTC Training - TY2018

When a taxpayer receives SSDI, this payment will become regular Social Security at retirement age. (65) HOWEVER, Kansas continues to recognize this payment as disability for the purposes of Homestead and PT. Kansas STTC Training - TY2018

Other types of disability not included in household income Veteran’s Disability % does not matter Railroad Disability Tier 2 (claimant must tell us) Kansas STTC Training - TY2018

Homestead & PT Filing Errors
Incorrect or omitted prior year Fed EIC Including SSDI in household income Forgetting to ask the taxpayer if they received disability benefits prior to turning 65. Kansas STTC Training - TY2018

Homestead & PT Tips Homestead is not a Joint Return We only prepare a valid Homestead return for the primary taxpayer. If only the spouse qualifies for Homestead (age, home in her name, etc), the spouse should be entered first on the ENTIRE return. Otherwise, it can not be e-filed. Kansas STTC Training - TY2018

Delinquent property taxes
If claimant’s property taxes are delinquent for Homestead, the entire refund will be sent to the County Treasurer’s office. Treasurer may refund the excess or apply it to next year’s taxes. If claimant’s property taxes are delinquent for PT, they can not claim PT. Definition of delinquent is that the Dec 20, 2018 payment was not completely paid on time. Kansas STTC Training - TY2018

Refund Advancement Program
See page 3 of Homestead Instructions Do not sign up anyone new for this program. BUT once they are on it, they should stay on it. Make sure you ask. A County Treasurer office contacted the Kansas State Coordinator this Fall and complained that we had missed several of these. Kansas STTC Training - TY2018

Entering Property taxes
4/3/ :03 PM Kansas Volunteer Tax Training and Homestead VS. SAFE Senior Entering Property taxes 2018 Property Tax Enter for K-40H or K-40PT County Property Tax statement 1st half due Dec of 2018 2nd half due May of 2019 Tax from property tax statement Does not include assessments, etc. Paid and due – property taxes may or may not have been paid Possible that 3 payments may have been made during tax year 2nd half 2011 (May 2012) + 1st and 2nd half 2012 (Dec 2012 and May 2013 payments) Kansas STTC Training - TY2018

Difference in Property Tax between Federal and Kansas
Federal property tax amount on Sch A line 5b is property tax PAID in the 2018 calendar year For K-40H or K-40PT the line 12 amount of property tax paid is what was paid or will be paid for the Dec and May 2019 installments from the real estate tax bill Kansas STTC Training - TY2018

Entering Property Taxes
The State of Kansas has gotten extremely picky on getting the correct Property Tax amount entered on PT. You must enter the amount of Property Tax billed. People who qualify for PT must not be delinquent in the taxes paid. Kansas STTC Training - TY2018

Preparing Homestead & PT in TaxSlayer

Handling of Social Security
TaxSlayer automatically moves Social Security from the Federal return to K-40H and K-40PT. 50% is counted for K-40H 100% is counted for K-40PT Kansas STTC Training - TY2018

Obvious complications
If Social Security is automatically added, how do we make sure Social Security Disability is not added to Household Income? Enter the full amount of SSDI in the Social Security entry as a NEGATIVE number, and Enter the full amount of SSDI as Disability Benefits in the Excluded Income section of either K-40H or K-40PT section. Kansas STTC Training - TY2018

Not so obvious complications
If Social Security is automatically added, how do we handle Railroad Tier 1, which should be counted 100%? Enter the full amount of Railroad Tier 1 in the Social Security entry (K-40H line 6) as a NEGATIVE number, and Enter the full amount of Railroad Tier 1 in the railroad/pension entry (K-40H line 7) as a POSITIVE number. Kansas STTC Training - TY2018

SSI Since SSI (for financial need) is not entered into either the Fed or KS return, SSI must be added into Household Income, on the Social Security line (K-40H line 6). SSI Disability should not be entered into Household Income, but the full amount of SSDI should be entered as Disability Benefits in the Excluded Income section of either K-40H or K-40PT section. Kansas STTC Training - TY2018

Railroad Retirement Entries in the TaxSlayer RRB-1099R input screen are automatically and correctly transferred to the Kansas Income Tax and Homestead/PT forms. Kansas STTC Training - TY2018

Railroad Disability We recently had clarification from KDOR about the handling of RR Disability on Homestead and PT. If someone says that they are on Railroad Disability or they WERE on Railroad Disability before retirement age, Railroad Tier 2 is the actual disability benefit. Kansas STTC Training - TY2018

Railroad Disability Railroad Tier 1 is not considered disability unless the SSA has granted that separately from the Railroad Board. Railroad Tier 2 is considered disability. This should not be included in Household Income, even after the claimant has reached retirement age. Kansas STTC Training - TY2018

Railroad Disability In TaxSlayer, enter the full amount of Railroad Tier 1 in the Social Security entry (K-40H line 6) as a NEGATIVE number. Then enter the full amount of Railroad Tier 1 in the pension entry (K-40H line 7) as a POSITIVE number. This is normal handling of Railroad Tier 1, as shown on slide 30. Kansas STTC Training - TY2018

Railroad Disability In TaxSlayer, enter the GROSS distribution of Railroad Tier 2 in the Railroad/Pensions entry (K-40H line 7) as a NEGATIVE number. Then enter the GROSS distribution of Railroad Disability Tier 2 in the Excluded Income section of either K-40H or K-40PT section. Kansas STTC Training - TY2018

Handling of Pensions For pensions that are taxable on Fed and Kansas, the TAXABLE portion of the pension will be included in KAGI, (K-40H line 4). The difference between GROSS distribution and the taxable amount will flow automatically to K−40H line 7. ROTH distributions flow automatically to line 7. Kansas STTC Training - TY2018

Handling of Pensions IRA rollovers and Qualified Charitable Distributions should not be included in Household Income. TaxSlayer correctly handles IRA rollovers which are entered correctly on the 1099-R screen, including the check box and amount. QCD’s will need to be manually removed from Household income Enter the QCD included in the Gross Distribution as a NEGATIVE amount on the Pensions line in Household Income Kansas STTC Training - TY2018

Other Household Members
Income from Other Household members must be entered into Household Income. Then detailed info, including income must be completed for each adult household member. Kansas STTC Training - TY2018

Direct Deposit The Homestead section of TaxSlayer has an entry for direct deposit bank info. This will be processed regardless of whether there is a direct deposit/debit, check for payment/refund, or a $0 balance for the K-40 form. No workaround is necessary Kansas STTC Training - TY2018

Deceased Claimant If a claimant dies in 2018 and has no surviving spouse to claim Homestead, complete the return normally and TaxSlayer will prorate correctly, based on the date of death listed in Basic Information. TaxSlayer correctly prepares the Homestead claim for a claimant that died in 2019. Kansas STTC Training - TY2018

Partial year in Homestead
If the claimant didn’t live in a qualifying Homestead for the entire year, we need to prorate the property taxes for the months in the home. TaxSlayer will calculate from there. Kansas STTC Training - TY2018

Now it’s YOUR turn… Questions? Comments? Concerns? Kansas STTC Training - TY2018

HOMESTEAD REFUND and PROPERTY TAX RELIEF CLAIM

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HOMESTEAD REFUND and PROPERTY TAX RELIEF CLAIM

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