Property Tax Rebate Information

The IRS provides property tax deductions.

The Internal Revenue Service (IRS) provides federal property tax deductions for property taxes charged by local and state governments. Many states, such as New Hampshire, also provide real estate tax deductions for local assessments.

Features

The IRS allows a deduction for property taxes if the tax assessment applies uniformly across all homeowners in the state or local jurisdiction. The tax must be for the public's welfare and not for a special privilege given to the taxpayer. The tax deduction is for up to $500 for single taxpayers or $1,000 for married taxpayers filing jointly. The tax deduction applies even for taxpayers who do not itemize their deductions on their returns.

Types

New Hampshire offers a Low and Moderate Tax Relief Program to its low-income taxpayers earning less than $20,000 for single filers and $40,000 for head of household or married filers. If the taxpayer receives a rebate for state taxes, then the taxpayer may have to reduce the federal tax benefits accordingly.

Warning

The IRS rules disallow a taxpayer's deduction of itemized service charges on property, since these are not classified as property taxes. For instance, a unit fee for using water is not a tax but a consumption charge.

References

• Internal Revenue Service: Publication 530 (2009), Tax Information for Homeowners
• New Hampshire Department of Revenue Administration: Low & Moderate Tax Relief Program