SI BOS00820.100 Massachusetts Senior Property Tax Work-Off Program (BASIC, 02/15)

A. Introduction

The Massachusetts Senior Property Tax Work-Off Program is a program that allows seniors to do volunteer work for their local governments in exchange for a reduction in their property taxes. Many Massachusetts cities and towns offer a tax work-off program, but some do not. Local programs set their own rules for the program using state guidelines.

To be eligible, an individual must:

• Be age 60 or older;

• Own a home in the city or town where he or she applies, and pay property taxes on that home;

• Meet local program requirements, such as income limits or years of residency; and

• Offer a skill that his or her local government can use.

Most cities/towns will issue a check or voucher to the seniors for their services, which they will then sign back to the city/town to apply toward their property taxes.

B. Policy

Under Internal Revenue Service (IRS) regulations, any earnings received through remuneration (in this situation, a reduction in property tax in return for services) must have Federal and Medicare taxes withheld. The IRS ruled that the abatement amount is included in the taxpayer’s gross income for FICA tax purposes.

Any earnings received through the Massachusetts Senior Property Tax Work-Off Program meet the definition of wages in SI 00820.100 and RS 02505.005. Additionally, Section 209 of the Social Security Act does not specifically exclude tax abatement payments. These payments are not categorized under Chapter 66 per SI 00830.610 or under Chapter 35 per SI 00830.640.

C. Procedure

Code the payments received from the Massachusetts Senior Property Tax Work-Off Program as earned income (wages) on the Wages screen in MSSICS (MSOM INTRANETSSI 014.027) or as type “W” earned income for non-MSSICS cases (SM 01005.170). Follow the standard monthly wage verification procedure outlined in SI 00820.130 and SI 00820.135.

Ask participating seniors to submit the pay stubs they received along with their checks or vouchers from the city/town. If pay stubs are not available, then request that they supply a statement from their city’s/town’s treasurer or tax collector’s office detailing the monthly payments. Fax the documentation into the electronic folder for initial claims or the Non-Disability Repository for Evidentiary Documents (NDRED) for post-eligibility events.

D. References

SI 00820.100 – Wages

RS 02101.010 – Who Is an Employee

RS 02505.005 – How to Count Wages under the Earnings Test (ET)