Pennsylvania Property Tax and Rebate Program (2024)

Quick Reference

Property Tax/Rent Rebate Program

Maximum Rebate (2024): Up to $650

Eligible Claimants: - Age 65 or older - Widows/widowers age 50 or older - Disabled individuals age 18 or older

Income Limits: - Homeowners: $35,000 maximum - Renters: $15,000 maximum

Key Feature: Half of Social Security income excluded from income calculation

Deadline: June 30 (automatic extension to December 31)

Property Tax Overview

PA does NOT have state property tax: - Property tax imposed by local governments only - School districts - Counties - Municipalities (cities, boroughs, townships)

Rates vary widely: - By school district - By county - By municipality - Total can range from under 1% to over 4% of assessed value

Details

Property Tax/Rent Rebate Program

Purpose:

Provides relief for: - Senior citizens - Widows and widowers - Disabled individuals

Funded by: - PA Lottery proceeds - PA gaming revenues

History: - Established 1971 - Expanded multiple times - Funded over $7 billion since inception

Eligibility Requirements

Age requirement (one of the following): - Age 65 or older during claim year - Widow/widower age 50 or older during claim year - Disabled (age 18 or older) and receiving Social Security disability

Residency: - PA resident entire claim year - If moved during year, not eligible for that year

Ownership/rental: - Own and occupy home, OR - Rent dwelling

Cannot claim if: - Lived in nursing home entire year and rented out residence - Received Supplemental Security Income (SSI)

Income Limits (2024)

Homeowners:

Maximum income: $35,000 - Includes half of Social Security - Includes all other income

Example calculation: - Social Security: $20,000 (count $10,000) - Pension: $15,000 (count $15,000) - Interest: $2,000 (count $2,000) - Total countable income: $27,000 (eligible)

Renters:

Maximum income: $15,000 - Same calculation as homeowners - Lower threshold

Income Definition for Rebate

What counts as income:

100% counted: - Wages and salaries - Self-employment income - Interest and dividends - Pensions and annuities (other than Social Security) - IRA distributions - Capital gains - Rental income - Alimony received - Unemployment compensation - Workers compensation

50% counted: - Social Security benefits (retirement, disability, survivor) - Railroad Tier I benefits - Social Security equivalent portion of Railroad Tier II

NOT counted: - SSI (Supplemental Security Income) - Gifts - Inheritances - Proceeds from sale of home - Surplus food or other relief in kind - Fuel and utility assistance - Property tax rebate from prior year

Rebate Calculation

Formula varies by income level:

Homeowners:

Income up to $8,000: - Rebate = property taxes paid or $650, whichever is less

Income $8,001 to $15,000: - Rebate = 50% of property taxes paid or $500, whichever is less

Income $15,001 to $18,000: - Rebate = lesser of: - Property taxes paid minus 4% of income, OR - $500

Income $18,001 to $35,000: - Rebate = lesser of: - Property taxes paid minus 8.5% of income, OR - $500

Renters:

Rebate = 20% of rent paid (up to $650)

Income affects eligibility, not rebate amount for renters

Maximum rebate: $650

Property Taxes That Qualify

What qualifies:

Real estate taxes paid: - School district property tax - County property tax - Municipal property tax - On principal residence only

Special assessments if: - For property improvements (sewer, water, sidewalk) - Only portion for maintenance and operation - Not construction costs

What does NOT qualify:

Not eligible: - Penalties and interest - Sewer and water bills (unless part of property tax) - Trash collection fees - Homeowners association fees - Mortgage payments - Property taxes on second home - Property taxes paid by reverse mortgage

Rent That Qualifies

Eligible rent: - Rent paid for principal residence - Must be for dwelling in PA - Mobile home lot rent qualifies

Calculation: - 20% of gross rent is deemed property tax equivalent - Example: $800/month rent × 12 months = $9,600 × 20% = $1,920 deemed property tax - Rebate = up to $650

Not eligible: - Rent for nursing home - Subsidized housing where no rent paid - Living with relative and not paying rent

Application Process

Form PA-1000: - Property Tax or Rent Rebate Claim - File annually - Paper or online (myPATH)

Required documentation:

Homeowners: - Copy of property tax bill(s) showing amount paid - Proof of payment (canceled check, receipt) - Social Security income statement (SSA-1099) - Proof of other income

Renters: - Rent certificate from landlord (PA-1000 RCS) - Canceled checks or receipts - Lease agreement (if requested) - Social Security income statement - Proof of other income

Where to file: - Online: myPATH.pa.gov - Paper: PA Department of Revenue, Harrisburg - Free assistance: Area Agencies on Aging, senior centers, tax preparers

Deadline: - June 30 following claim year - Automatic extension to December 31 - No further extensions

Processing time: - Typically 60-90 days - Refunds issued as checks - Direct deposit available

Supplemental Rebate

Additional rebate in some years:

When available: - If PA Lottery revenues exceed certain threshold - Determined annually by legislature

Amount: - $975 supplemental in some recent years - Added to regular rebate - Same eligibility requirements

Not guaranteed: - Depends on state budget - Lottery revenues - Legislative action

Special Circumstances

Spouse in nursing home: - If one spouse in nursing home, other spouse at home - Can still claim if home spouse pays property tax or rent - Use home spouse's information

Death during year: - Estate can claim rebate - If claimant died after filing but before receiving rebate - Rebate paid to estate

Multiple claimants on property: - If multiple owners, only one can claim - Typically owner who paid the tax

Mobile homes: - If own mobile home, property tax on home qualifies - Lot rent treated as rent (20% deemed property tax) - Both may be claimed

Property Tax Assessment

PA counties vary:

Assessment practices: - Each county sets own assessment schedule - Some reassess regularly (annually) - Others have not reassessed in decades - Creates inequities

Common Level Ratio (CLR): - Compares assessed value to market value - Used to adjust assessments - Published annually by State Tax Equalization Board

Example: - Home assessed at $100,000 - Market value $150,000 - CLR = 66.67% - For rebate purposes, typically use actual assessment

School District Property Tax

Largest component:

School taxes typically: - 60-70% of total property tax bill - Fund local school districts - Rates vary dramatically by district

Act 1 of 2006: - Limits school tax increases - Requires voter approval for increases above index - Provides some property tax relief

Homestead/Farmstead Exclusion: - Reduces assessed value for property tax - Available to all homeowners (not just seniors) - Amount varies by school district - Separate from rebate program

County and Municipal Property Tax

County tax: - For county services - Typically 15-25% of total bill

Municipal tax: - City, borough, or township - Typically 10-20% of total bill - Some municipalities have no property tax

Total effective rate: - Combination of all three - PA average: approximately 1.5% of market value - Range: 0.8% to 2.5%+ depending on location

Appealing Assessments

Property owners can appeal:

Grounds for appeal: - Assessment higher than market value - Unequal assessment compared to similar properties

Process: - File appeal with county board of assessment - Provide evidence of value (appraisal, comparable sales) - May have hearing

Timing: - Deadlines vary by county - Typically limited window each year - Check county website

Success can reduce rebate: - Lower assessment = lower property tax - Lower property tax = lower rebate - But net benefit usually favors taxpayer

Combined Tax Benefits for Seniors

PA seniors can receive:

Property Tax/Rent Rebate: - Up to $650 (or more with supplemental)

No tax on retirement income: - Pensions exempt - Social Security exempt - IRA/401(k) distributions exempt

Homestead Exclusion: - Reduces assessed value - Separate from rebate - All homeowners eligible

Result: - PA relatively tax-friendly for seniors - Especially those with pension income - Property tax rebate provides additional relief

Citations

Pennsylvania Statutes: - PA Act 1 of 2006 - Taxpayer Relief Act - 72 P.S. § 4751-1 et seq. - Property Tax and Rent Rebate Act

Regulations: - 61 Pa. Code Chapter 501 - Property Tax or Rent Rebate Program

PA Department of Revenue: - Property Tax/Rent Rebate Program Information - PA-1000 Form and Instructions - Income Guidelines for Rebate - https://www.revenue.pa.gov/

Forms: - PA-1000 - Property Tax or Rent Rebate Claim - PA-1000 RCS - Rent Certificate (for landlord to complete) - PA-1000-IN - Instructions

Resources: - State Tax Equalization Board (Common Level Ratios) - County assessment offices - PA Department of Aging - Area Agencies on Aging - https://www.aging.pa.gov/

Additional Information: - PA Lottery - Funding source for rebates - Pennsylvania Gaming Control Board - Gaming revenues for rebates - Local school district websites - Homestead exclusion information