Property Tax Deductions for Senior Citizens in Indiana

Property tax bills challenge many Indiana senior citizens, who often live on retirement savings and fixed incomes from other sources. Indiana, though, has passed multiple laws designed to offer senior citizens tax deductions for their property taxes. The state limits the deductions to primary residences and also places limits on household income and assessed property value.

In Indiana, the government allows for a deduction for senior citizens over 65 if they meet certain qualifications. Tehy must be over age 65 or the surviving spouse of a deceased spouse who was over 65 at the time of death. In the case of a surviving spouse, the surviving spouse also must be at least 60 years of age. The deduction also features an income qualification. The household must have a combined adjusted gross income of less than $25,000 and an assessed property value of no more than $182,430, for tax year 2011. The owner also must have owned the property before March 1 of the current year. Senior citizens who meet the qualifications receive the lesser of a 50 percent deduction or a $12,480 deduction. A separate over-65 circuit-breaker program limits increases in property value to 2 percent per year for households with a combined adjusted gross income of $40,000 or less or an individual income of $30,000 or less. These individuals also must have an assessed property valuation of no more than $160,000.

Disabled veterans living in Indiana can benefit from a property tax deduction if they served at least 90 days of honorable military service and are totally disabled or are at least 62 years old and 10 percent or more disabled. These veterans can claim a $12,480 annual deduction as long as their homes are not valued at more than $113,000. The deduction amount is greater for some veterans. Disabled veterans who served during wartime receive a $24,960 deduction, and disabled wartime veterans who are 100 percent disabled receive a deduction of $37,440.

Any Indiana resident who is blind or disabled, including a senior citizen, can claim a property tax deduction on a primary place of residence if the individual has a gross taxable income of less than $17,000. These individuals must provide a statement of disability or blindness from a physician or a Social Security Disability statement. The deduction amount equals the lesser of the full amount of the assessment or $12,480.

Senior citizens, as well as all homeowners in Indiana, can claim a tax deduction if their home serves as their primary residence. The home and up to one acre of land can qualify for the homestead exemption. This exemption provides a deduction in assessed property value. The deduction amount equals either 60 percent of the assessed value of the home or a maximum of $45,000.