Idaho Property Tax Reduction (Circuit Breaker)

Quick Facts

• Purpose: Idaho’s Property Tax Reduction program—often called the circuit breaker—lowers the property tax bill on a primary residence for low-income seniors, people with disabilities, and certain veterans by paying a portion of the tax on their behalf.
• Benefit size: Depending on household income and qualifying status, the state pays between $150 and $1,500 of the property tax bill each year. Veterans with 100% service-connected disabilities may qualify for full exemption under a separate program but can still use the circuit breaker if more advantageous.
• Delivery method: Approved applicants see a credit applied directly to their tax bill. Counties subtract the state-paid amount from the bill before mailing statements or issue a refund if taxes were already paid.
• Timeline: Applications are accepted January 1 through April 15. The credit applies to the current year’s tax bill, which is issued in November and due in December.

Program Overview

Idaho’s circuit breaker is codified in Idaho Code §63-701 through §63-710. The program targets households with limited resources that would otherwise struggle to pay property taxes. Unlike exemptions that reduce taxable value, the circuit breaker provides a direct payment against the bill, so the savings equal the approved credit amount.

The program uses a graduated benefit table. Applicants are placed into income brackets, each associated with a set credit amount. The lower the income, the higher the credit. The income limit adjusts annually based on the Idaho consumer price index; for the 2024 application year, the cap is $37,000 of total household income.

Eligibility Details

Residency and Ownership

• Applicants must own and occupy the home as their primary residence before April 15. The program covers up to one acre of land surrounding the home. Manufactured homes qualify if owned and taxed as personal property; applicants must also own the land or have a lease exceeding 99 years.
• If the applicant moves to a nursing home or lives in a care facility, the credit can continue if the home is not rented and remains available for occupancy.

Qualifying Status

Applicants must meet at least one of the following conditions by January 1 of the application year:

• Age 65 or older
• Widow or widower (any age)
• Blind
• Fatherless or motherless child under 18
• Receiving Social Security Disability (SSDI), Supplemental Security Income (SSI), Railroad Retirement disability, federal civil service disability, or Public Employee Retirement System of Idaho (PERSI) disability
• Veteran with a 10% or more service-connected disability, or veteran receiving a pension for a non-service-connected disability

Income Calculation

• Household income includes wages, Social Security (gross amount), pensions, annuities, interest, dividends, capital gains, rental income, unemployment benefits, workers’ compensation, and certain gifts or support payments.
• Deductions include medical and dental expenses not reimbursed by insurance, Medicare premiums, prescription drug costs, and funeral expenses paid for a spouse or dependent.
• Applicants must provide documentation such as federal tax returns, 1099 forms, and medical expense receipts.

Asset Limitations

• Total fair market value of the home and up to one acre must not exceed $400,000. If the value is higher, the homeowner may still qualify for partial relief under the deferral program.
• The program does not consider assets like savings accounts, but significant assets may trigger additional verification.

Benefit Calculation

• The Tax Commission publishes an annual benefit table (Schedule 1) listing income ranges and credit amounts. For example, households with income up to $13,700 may receive a $1,500 credit, while those near the $37,000 limit may receive $150.
• The credit cannot exceed the amount of property tax owed (excluding special assessments). If the credit is higher than the tax bill, the excess is not paid out.
• The circuit breaker cannot be combined with the Property Tax Deferral for the same year. Applicants must choose the option that provides the most benefit.

Application Process

1. Gather documents: Federal and Idaho tax returns, SSA-1099, 1099-R, W-2s, proof of disability or veteran status, mortgage statements, medical expense receipts, and proof of Idaho residency (driver’s license, utility bills).
2. Obtain the application: Form P.T.C. is available from the county assessor, the Idaho State Tax Commission website, or by calling 208-334-7736.
3. Complete the form: Provide personal information, property description, occupancy date, income sources, deductions, and qualifying status. Attach copies of required documents. Signatures of both spouses are required for jointly owned property.
4. Submit to county assessor: Deliver the application and documentation by April 15. Some counties offer drop boxes or mail-in options; ensure mail is postmarked by the deadline.
5. Await review: County staff verify eligibility and forward approved applications to the Tax Commission. You may be contacted for additional information.
6. Receive decision: Approval letters typically arrive in July or August, noting the credit amount. The county applies the credit to the tax bill issued in November.
7. Reapply annually: There is no automatic renewal. File each year to continue receiving the credit.

Documentation Checklist

• Proof of Idaho residency and occupancy (driver’s license, voter registration, utility bill)
• Property tax notice or assessment value statement
• Federal income tax return or Statement of No Filing
• SSA-1099, SSI letters, or pension statements
• Disability or veteran benefit award letters
• Receipts for medical, dental, and prescription expenses
• Proof of homeowner’s insurance premiums (deductible expenses)
• Death certificate (for widow(er) status)

Coordination With Other Programs

• Property Tax Deferral: Idaho allows eligible homeowners to defer taxes at low interest. Compare benefits: the circuit breaker provides immediate credits, while deferral delays payment until the property is sold.
• Veteran Property Tax Benefit: Veterans with 100% service-connected disabilities may qualify for a full exemption (up to $1,500 credit). Evaluate which program yields greater savings.
• Grocery Credit Refund: Idaho residents may claim a refundable grocery tax credit on state income taxes. Use the circuit breaker credit to free up funds for other living expenses while the grocery credit offsets food costs.
• Energy assistance: Pair the circuit breaker with LIHEAP and weatherization services to reduce overall housing costs.

Strategic Tips

• Apply early: Early submission allows county staff to review documents and request missing information before the deadline.
• Track medical expenses: Keep a spreadsheet of unreimbursed medical costs throughout the year. These deductions can reduce household income and boost your credit tier.
• Check assessment values: Verify that the county’s assessed value of your home is accurate. Appeal if the value seems inflated; a lower assessed value ensures the property remains under the $400,000 limit.
• Coordinate with family: If adult children assist with finances, grant them a limited power of attorney to communicate with the assessor and gather documents.
• Consider direct pay: Even if you expect the credit to cover most taxes, pay at least the remaining balance promptly to avoid delinquency interest.

Example Households

1. Low-income widow: Mrs. Anderson, age 70, lives alone in Ada County with annual income of $15,000 from Social Security and a small pension. After $2,000 in medical deductions, her net income is $13,000. She qualifies for a $1,500 credit, wiping out most of her $1,450 tax bill.
2. Disabled veteran: Mr. Chen, 58, receives $30,000 in VA disability payments and $5,000 from part-time work. Because VA disability is excluded, his countable income is $5,000, placing him in the highest credit tier. He receives a $1,500 credit and considers switching to the full veteran exemption the following year after consulting a VSO.
3. Senior couple with moderate income: The Garcias, both 67, have combined income of $34,000. After $4,000 in medical expenses, their net income is $30,000. They receive a $500 credit, which they apply toward their November bill, reducing the amount due in December.

Common Mistakes

• Missing deadline: Applications postmarked after April 15 are denied. Counties rarely grant extensions.
• Incomplete income documentation: Omitting pension statements or misreporting Social Security amounts leads to denial. Provide full documentation for every income source.
• Forgetting to deduct medical expenses: Many applicants overlook deductible expenses that could move them into a higher credit tier. Keep receipts from pharmacies, dentists, and insurance premiums.
• Combining with deferral: Applicants cannot take the circuit breaker and deferral simultaneously. Choose the program that provides the best net benefit.
• Not reapplying: Credits do not renew automatically. Mark your calendar each January to gather documents and refile.

Frequently Asked Questions

Can I apply if my home is held in a trust? Yes, if you are the trustor, beneficiary, or retain a life estate. Provide trust documentation to prove beneficial ownership.

Do I need to pay taxes before receiving the credit? No. The credit is applied to the November bill. If you pay early, the county will issue a refund for the credited amount.

Is VA disability counted as income? No. Service-connected disability payments are excluded. However, other VA benefits like pensions may be counted.

Can renters apply? No. The circuit breaker applies only to homeowners. Renters should explore the Idaho Housing Stability Program or local assistance.

What if I sell my home midyear? The credit applies to the property for the tax year. If you sell, prorate taxes with the buyer at closing. The credit stays with the property and typically benefits whoever owns the home when taxes are due.

Additional Resources

• Idaho State Tax Commission Property Tax Reduction page: https://tax.idaho.gov/i-1070.cfm
• Application Form P.T.C.: https://tax.idaho.gov/wp-content/uploads/forms/2024/ptc.pdf
• County assessor directory: https://tax.idaho.gov/countyofficials
• Senior Services and Area Agency on Aging support: https://aging.idaho.gov/
• Idaho Division of Veterans Services: https://veterans.idaho.gov/

Idaho’s circuit breaker offers reliable relief if you prepare documents early, accurately report income, and renew annually. Combine it with other supports to maintain stable housing costs on a limited budget.