Tax Exemptions and Credits For Seniors in New York

Tax season can be stressful at any age. But for seniors, it can be even more challenging, particularly for those on a fixed income.

Whether you live at home or in the Judson Meadows community, understanding the tax credits and deductions you may be entitled to receive can help make the process less daunting, while leaving a little extra money in your pocket. Not only does the federal government allow higher filing thresholds for seniors, but New York State also offers numerous tax deductions and credits to help seniors reduce their tax liability. 

Social Security, Pensions, and Annuities

Seniors can take advantage of several modifications to reduce their New York State tax liabilities. For example, for seniors aged 59.5 and older, up to $20,000 of pension and annuity income can be subtracted. Additional deductions include:

• All social security benefits
• Qualified pension benefits from New York State, federal, and local government sources
• Qualified pension distributions from New York State, federal, and local government sources
• Real property tax credits up to $375 for seniors with a gross income of $18,000 or less
• Nursing home assessment credits for seniors who paid for qualifying assessments on billing statements from a New York State nursing home

Property Taxes

New York State allows property tax deductions for seniors that can reduce the amount of tax they pay on their properties by up to 50%. The property tax exemption for seniors varies, depending on several factors. Income level and location are two significant factors.

Additionally, New York State law allows villages, towns, cities, counties, and school districts to determine the maximum income allowed to qualify for the 50% exemption. That figure typically ranges from $3,000 to $50,000.

For those with an income above the maximum in their location, the law allows three sliding scale options. Seniors may receive an exemption, depending on their income:

• If income is below $55,700, they qualify for 20%.
• If income is $55,701 to $57,500, they qualify for 10%.
• If income is $57,501 to $58,400, they qualify for 5%.

For questions about the income limits in your area, contact your local assessor.

Capital Expenses

Capital expenses qualify as a medical expense deduction for seniors who make medically necessary home improvements. These include installing equipment and making home improvements for the primary purpose of medical care for themselves, their spouses, or their dependents.

The cost of permanent improvements must be reduced by the amount the improvements increase the property’s value. The difference is then qualified as a medical expense. For example, if the home improvement cost $10,000, and it increased the value of the home by $8,000, the capital improvement deduction would be $2,000.

This tax credit for seniors may help offset the costs of improvements such as:

• Widening doorways or installing ramps at entrances
• Installing railings, grab bars, and bathroom modifications
• Modifying hallways and interior doorways, fixtures, and electrical outlets
• Lowering kitchen equipment and cabinetry
• Installing lifts, fire alarms, and warning systems

Medical Expenses

Seniors who have many healthcare expenses could benefit from the tax savings provided by this deduction. However, only the medical expenses exceeding 7.5% of adjusted gross income qualify for this itemized deduction. Some of the expenses that qualify include:

• Dental and medical insurance premiums
• Premiums for qualified long-term care insurance plans
• Prescription drugs and insulin
• Dentists, eye doctors, acupuncturists, chiropractors, and medical doctors
• Physical and occupational therapists, psychologists, and psychiatrists
• Medical examinations and diagnostic tests
• Hospital care

Nursing Care

Seniors who pay for in-home nursing or medical care and services to care for their condition may qualify for a medical expense deduction. It includes services like dressing changes, bathing and grooming patients, and administering medication. Only the amount spent on nursing services can be deducted.

Suppose a senior has a visiting nurse who gets paid $400 weekly, but 10% of their time is spent on household chores like laundry or cleaning. That 10% would not be deductible.

Long-Term Care

The medical expense deduction includes the cost of eligible nursing homes and long-term care facilities. If medical care is the senior’s main reason for being there, the costs of meals and lodging can also be included along with nursing care and medical expenses. For seniors living in an assisted living community for personal reasons, only medical expenses can be considered.

Where to Get Help with Taxes

Those who need help with their taxes may qualify to meet with trained volunteers. Organizations like Volunteer Income Tax Assistance, Tax Counseling for the Elderly, and NYS Taxpayer Assistance Program provide free preparation and filing services.

Do Your Judson Meadows Expenses Count as a Deduction?

Some of the costs our community members pay qualify as a medical deduction. Every individual and their living situation are unique.

When the medical expenses exceed 7.5% of seniors’ income, those expenses qualify for the deduction. These expenses must be itemized, so keeping good records is important.

At Judson Meadows, our friendly, knowledgeable staff is always happy to answer questions and guide seniors and their families in making sound financial choices. Contact us today at 518-831-2400 to learn more and to have any questions answered.