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Volume 11 - Opinions of Counsel SBRPS No. 118

Opinions of Counsel index

Senior citizens exemption (income requirement) (Social Security - retroactive payment) - Real Property Tax Law, § 467:

For purposes of determining income eligibility for the senior citizens exemption, a retroactive Social Security payment received by an applicant is considered income in the year that the payment is received.

We have received an inquiry concerning the senior citizens exemption (Real Property Tax Law, § 467). The assessor states that a resident previously received the exemption, {1} but that she received a $10,000 payment from the Social Security Administration apparently to compensate for some years of underpayment of benefits. Adding this one time payment to her income would disqualify her from eligibility for the senior citizens exemption, {2} and the question is if it must be considered as income.

Income for purposes of section 467 specifically includes social security benefits and the income reporting period is the income tax year “immediately preceding the date of making application for exemption . . .” (RPTL, § 467(3)(a)). {3}  While some of the social security payments the applicant received were retroactive payments for earlier years, the applicant did in fact receive those moneys during this one particular year.

The law includes no income adjustment for retroactive social security benefits received. As the assessor notes, the applicant received the senior citizens exemption in prior years. Clearly, had the retroactive moneys been received in those years, she may have received less (or even no) exemption in some or even all of those years. In any event, the law includes no provision for reconsidering the senior citizens exemptions which may have been granted in those prior years during which the higher benefits should have been but were not received.

January 18, 2008

{1}  Note that recipients of the senior citizens exemption automatically qualify for the enhanced STAR exemption (RPTL, § 425(6)(c)) as well.

{2}  Presumably, given the significantly higher income limit applicable to the enhanced STAR exemption, it will not disqualify her from that exemption, even if some or all of the $10,000 is included in her federal adjusted gross income which, after deduction of taxable distributions from individual retirement accounts, determines income eligibility for that exemption (§ 425(4)(b)(ii)).

{3}  We addressed the income reporting period applicable to section 467 in 10 Op.Counsel SBRPS No. 47.