PA Amends Definition of “Income” for Property Tax/Rent Rebate Program

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For many Pennsylvania seniors, the property tax and rent rebate program has been an important tool in their financial planning. One of the inequities in computing the appropriate rebate has been in the treatment of pension benefits that were fully included in the calculation of income to determine qualification for the rebate. Now, a recently-passed amendment to the Commonwealth’s Fiscal Code (included as part of the State’s 2018-19 budget) modifies the calculation of income for these purposes.

Pursuant to the provision, for Pennsylvania property tax and rent rebate program purposes, the definition of “income” is amended for persons who receive payments from the federal Civil Service Retirement System that are pension benefits that accrued during a period of employment when they did not have to contribute to Social Security.

Beginning with property tax or rent rebate claims for tax or rent due and payable in calendar year 2018, such persons can exclude, from their property tax or rent rebate income, an amount to be determined by the Department of Revenue. This amount will be 50% of the average retired workerSocial Security payment.

The provision is included in Act 42 (H.B. 1929), Laws 2018, effective June 22, 2018.

Should you have questions or comments, please contact Bob Grossman or Shawn Firster.