| Category: | Tax Credits | | Category No.: | 012 | | Subject: | Homestead Credit | | Subject No.: | 150 | | Topic: | Calculations | | Topic No.: | 30 | | Date Issued: | 5/21/1999 | | Revision Date: | 10/1/2000 | The homestead credit is calculated by the Annapolis Data Center's mainframe computer. It is important to understand how the mainframe calculates this credit so that data can be entered properly and adjustments made correctly.
Below is a sample account, geo-81, use code-R, occupancy code-D, 4% local homestead cap.
| Base FCV |
Current FCV |
2002 Phase-in 1 |
Current Year (2002) Assmt |
|---|
| Land 50,000 |
Land 62,000 |
Total 148,000 |
Total 148,000 |
| Improvement 90,000 |
Improvement 102,000 |
Pref |
Pref |
| Total 140,000 |
Total 164,000 |
Cbkr 138,000 |
Cbkr 138,000 |
| Pref |
Pref |
|
Cnty Credit 14,240 |
| Cbkr 130,000 |
Cbkr 154,000 |
|
State Credit 0 |
| |
|
|
Munic Credit 0 |
| |
|
|
Credit Status Y |
| |
| |
Prior Year (2001) Assmt |
|---|
| Total 140,000 |
| Pref |
| Cbkr 130,000 |
| Cnty Credit 11,000 |
| State Credit 0 |
| Munic. Credit 0 |
| Credit Status Y |
For this account, the Base FCV's are for a 1/1/1999 date of finality, and the Current FCV's a 1/1/2002 date of finality. Thus the 2002 tax year will show the 1st phase-in for the Current FCV and the 2001 tax year will be the last phase-in for the Base FCV
Phased-in values are calculated as follows:
| Tax Year |
2001/2002 |
2002/2003 |
2003/2004 |
2004/2005 |
|---|
| Phased-in FCV |
140,000 |
148,000 |
156,000 |
164,000 |
| Phased-in Assmts* |
140,000 |
148,000 |
156,000 |
164,000 |
| Phased-in Cbkr |
130,000 |
138,000 |
146,000 |
154,000 |
*Assessments converted to 100% of Phased-in of FCV as of July 1, 2001. The Cbkr (Circuit Breaker) fields show the full cash values and assessments for the curtilage and the improvements on it. Only the circuit breaker is eligible for the homestead and homeowners tax credits. An account with a "H" occupancy code is entirely curtilage and thus the Cbkr and Total phased-in assessment fields will have the same value.
When the file is "rolled", usually in August, the "Current Year" figures are moved to the "Prior Year" fields and new current year assessments are calculated. The sample account would be updated as follows:
- The Current year is now the 2003/2004 tax year and the property is in the 2nd phase-in.
- The Total, Pref, and Cbkr phased-in FCV and assessment fields would be calculated from the Base and Current FCV's with the following results:
| 2003 Phase-in 2 |
Current Year (2003) Assmt |
|---|
| Total 156,000 |
Total 156,000 |
| Pref |
Pref |
| Cbkr 146,000 |
Cbkr 146,000 |
li>The County Homestead Credit is calculated by taking the prior year Cbkr (a) and subtracting the prior year County Credit (b), this difference is then increased by the county assessment cap (c), and this product is subtracted from the current year Cbkr (d). Any difference is the County Credit (e). If the credit is a negative number, it will show as zero. For the sample account the calculation would be:
| (a) |
|
(b) |
|
|
|
(c) |
|
|
| 138,000 |
- |
14,240 |
= |
123,760 |
x |
1.04
(4% cap) |
= |
128,710 |
| |
| (d) |
|
|
|
(e) |
|
| 146,000 |
- |
128,710 |
= |
17,290 |
- The State Homestead Credit is calculated the same way except with the State figures. For the sample account the calculation would be:
| (a) |
|
(b) |
|
|
|
(c) |
|
|
| 138,000 |
- |
0 |
= |
138,000 |
x |
1.10
(10% cap) |
= |
151,800 |
| |
| (d) |
|
|
|
(e) |
|
| 146,000 |
- |
151,800 |
= |
-5,800 |
Because the State Credit is negative, it will appear as zero.
- If the property is in a municipality, the same calculation would take place.
After the file is rolled, the account would appear as follows:
| Base FCV |
Current FCV |
2003 Phase-in 2 |
Current Year (2003) Assmt |
|---|
| Land 50,000 |
Land 62,000 |
Total 156,000 |
Total 156,000 |
| Improvement 90,000 |
Improvement 102,000 |
Pref |
Pref |
| Total 140,000 |
Total 164,000 |
Cbkr 146,000 |
Cbkr 146,000 |
| Pref |
Pref |
|
Cnty Credit 17,290 |
| Cbkr 130,000 |
Cbkr 154,000 |
|
State Credit 0 |
| |
|
|
Munic Credit 0 |
| |
|
|
Credit Status Y |
| |
| |
Prior Year (2002) Assmt |
|---|
| Total 148,000 |
| Pref |
| Cbkr 138,000 |
| Cnty Credit 14,240 |
| State Credit 0 |
| Munic. Credit 0 |
| Credit Status Y |
Note that the prior year fields are now for the 2002 tax year and the current year is 2003, also the property is now in the 2nd phase-in.
It is important to note that figures in the current year fields are calculated from the Base and Current FCV's. Figures in the prior year fields are not calculated, they are simply moved there from the current year fields at roll-over. This means that if the Base FCV's and/or the Current FCV's are changed, the current year assessments will be recalculated but the prior year assessments will not be recalculated. Because of this, there are circumstances when the prior year fields may have to be rekeyed to arrive at the correct homestead credit.
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