Weekly Column: Thousands Eligible for Tax Refunds

August 1, 2007

As I write this column, I cannot help but notice August is here and that means fall is coming soon. For many, August means going to the beach a few more times or having a couple more barbeques with family and friends. Still, many may see this as a time to take one last trip or prepare the kids for the upcoming school year. Unfortunately, most of these scenarios require having a little extra cash on hand.

The Maine Legislature would like to help!

A new application period is starting for the Maine Tax and Rent Refund Program also known as the "Circuit Breaker program.” The program actually sends rebate checks back to Maine homeowners and renters who qualify.

In the past, the Circuit Breaker program really only provided tax relief for lower income homeowners and renters, but thanks to a major change by the legislature a few years ago, the income guidelines have been expanded to include married couples owning homes with combined incomes less than $105,750 and single homeowners who make less than $80,750. One of the other qualifications is that your property taxes must have exceeded four percent of your income. Homeowners who meet these qualifications could be eligible to receive a rebate check back from the state as high as $2,000. For renters, the Circuit Breaker program also provides the same rebate benefits. Those paying more than 20 percent of their income in rent could also receive a refund back from the state under the program.

It turns out, more than 200,000 Maine residents are eligible to receive a rebate check from the state, but unfortunately, only about 100,000 applicants take advantage of the program each year.

The program is based on the previous tax year, and in this case, the previous tax year is 2006. New Circuit Breaker applications became available August 1st, and the deadline to qualify for the 2006 tax year for Circuit Breaker program is May 31, 2008. Those interested in applying have about nine months to send their application in. In the last application period for the 2005-tax year, 2,654 people in the Augusta area received refund checks back from the state averaging $344.

Maine’s tax burden like any other state affects its people and businesses in different ways. As the legislature continues to work hard to come up with a comprehensive tax reform plan that reduces our property tax and income tax burden, I want to remind everyone that there are some great programs right now like Circuit Breaker that do work.

To request a Circuit Breaker application, please call my office at 287-1515 or you can request a form online at my Web site at www.mainesenate.org/mitchell. Look for a link labeled Circuit Breaker Info.

Finally, there are a host of other tax relief programs many may qualify for including the Homestead Exemption for homeowners, Veteran’s exemption, Paraplegic Veteran exemption, and a tax exemption program for the blind. For more information about these programs, please go online to www.mainesenate.org/taxreform.

Libby Mitchell is the Senate Majority Leader in the Maine Senate. She represents the communities of Augusta, Vassalboro, China, Oakland, and Sidney for District 24.