Council passes Senior Citizen Tax Relief

The City of Milford passed an ordinance exempting seniors from a portion of their property taxes

Milford City Council recently passed a measure that would provide tax relief for those who are 65 and older. The updated regulation includes initial changes to increase income thresholds in response to inflation and include additional changes requested by council at a recent public hearing. The new tax relief ordinance retains an inflationary adjustment to $20,000 for a single owner-applicant and a $40,000 for a joint-owner. It also simplifies exempted income language while expanding income types to include government-sponsored post-retirement pension that is provided in lieu of social security benefits.

“We introduced this in September 2022 and considered it for approval at the September 26, 2022, meeting,” Lou Vitola, Finance Director, said. “The measure was postponed ot provide staff with time to research questions arising during the meeting, the foremost of which contemplated the merits of expanding the income exclusion beyond the code’s only two specifically cited income exclusions which were social security and railroad pensions.”

In addition to not including other forms of pensions, the original code also had what was termed a “marriage bonus” or “marriage penalty” which was in violation of IRS regulations.  The original code allowed property owners making $15,000 who collect social security or a pension to receive a tax exemption while married couples could not earn more than $12,750 each.

“You mention government pension,” Councilman Todd Culotta asked. “Is that every level or just federal?”

Vitola explained that it was every level, including police officers, first responders, firefighters and more who receive private and public sector pensions. Councilman Andy Fulton pointed out that the post office used to offer a pension, for instance. The new code reads that as long as the property owner’s income is below $20,000 for an individual and $40,000 for joint owners, they will receive exemption from property tax on $40,000 of their home’s assessed value. The income levels are exclusive of social security and government-sponsored pension payments.

“I do want to thank Councilman Fulton for bringing it to council’s attention that we were leaving out others that receive retirement benefits,” Councilman Jason James said. “These are government sponsored retirement benefits outside of social security, especially the veteran type benefits, so I think you for bringing it to our attention.”

The ordinance passed unanimously.