Tennessee Property Tax Relief Program

Quick Facts

• Purpose: Tennessee’s Property Tax Relief Program reimburses a portion of local property taxes paid on an owner-occupied residence. The state deposits the relief directly with the county trustee, resulting in a credit on the homeowner’s bill or a refund after payment.
• Target audience: Seniors aged 65+, homeowners who are totally and permanently disabled, disabled veterans, surviving spouses of disabled veterans, and surviving spouses of soldiers killed in action. Income limits apply to the senior and disabled category but not to disabled veterans.
• Benefit delivery: Qualified homeowners pay their property tax bill as usual and the state reimburses the county for the eligible portion. Many counties allow the credit to be applied before payment is due, lowering the cash outlay, while others issue a refund check.
• Funding cap: The state legislature appropriates funds each year, and benefit amounts are tied to the first $27,600 of market value for seniors/disabled and the first $175,000 for disabled veterans (values adjust periodically). Actual savings depend on local tax rates.

Program Overview

The Tennessee Property Tax Relief Program originated in 1973 to help seniors on fixed incomes stay in their homes. Over time, lawmakers expanded the benefit to cover totally and permanently disabled homeowners and disabled veterans. The program is administered by the State Board of Equalization within the Comptroller’s Office but delivered locally through county trustees and city collecting officials. Each year, the state sets income thresholds, forms, and reimbursement amounts, then reimburses counties for approved applications.

Unlike exemptions that reduce assessed value upfront, Tennessee’s relief acts as a reimbursement. Homeowners still receive a bill based on the property’s full assessed value (25% of appraised value for residential property), but the state covers part of the taxes due. Applicants must file annually to confirm eligibility, even if their circumstances do not change. Disabled veterans and their surviving spouses must also submit annual certifications from the U.S. Department of Veterans Affairs (VA).

Two major categories of applicants exist:

1. Elderly/Disabled Homeowners: Age 65 or older or totally and permanently disabled as of December 31 of the tax year, with combined household income not exceeding the indexed limit ($36,400 for 2024). Income includes Social Security, pensions, wages, interest, dividends, and net business income. The relief equals the taxes on up to $27,600 of market value. Counties may provide supplemental programs for those who still struggle with the remaining balance.
2. Disabled Veterans and Surviving Spouses: Veterans with a 100% permanent and total service-connected disability rating (or 100% due to individual unemployability) qualify for relief on the first $175,000 of market value, regardless of income. Surviving spouses retain eligibility so long as they do not remarry and continue to use the property as their primary residence. Surviving spouses of soldiers killed in action receive the same benefit even if the veteran did not previously qualify.

Eligibility Details

Residency and Ownership

• The applicant must own the property by October 1 of the tax year and occupy it as their primary legal residence. Mobile home owners who own the home but not the land can also qualify if they pay property taxes on the home itself.
• Ownership can be fee simple, life estate, or a qualifying trust interest. If the property is owned jointly, only one owner needs to meet the age or disability requirement, but all owners must sign the application.
• Applicants must provide proof of residency such as a Tennessee driver’s license, voter registration, or utility bill. The program does not cover rental or vacation properties.

Income Test for Elderly/Disabled Category

• Household income includes all occupants’ incomes, not just the applicant’s. Include Social Security (gross amount before Medicare deductions), Supplemental Security Income, retirement benefits, employment income, alimony, interest, and capital gains.
• Exclusions include non-taxable VA disability payments and certain medical reimbursements. Keep documentation such as SSA-1099 forms, pension 1099-R, and W-2s.
• If income exceeds the limit by even one dollar, the applicant is ineligible for that tax year. Applicants should review deductions and confirm amounts to avoid denial.

Disability Verification

• Totally and permanently disabled homeowners must provide a current Social Security Administration or Railroad Retirement Board letter stating the disability began on or before December 31 of the tax year, or a physician’s statement on the state form certifying permanent disability.
• Disabled veterans must submit VA Form 27-333, 27-444, or a current Summary of Benefits letter showing a 100% permanent and total rating or 100% due to individual unemployability. Veterans receiving specially adapted housing grants automatically qualify.
• Surviving spouses must provide proof of marriage, death certificate, and VA confirmation that the veteran died in the line of duty or was 100% disabled.

Benefit Amount and Calculations

The relief reimburses the taxes on a portion of the home’s value. Multiply the covered market value by the residential assessment ratio (25%) to get the assessed value, then apply the local tax rate.

Example for an elderly homeowner:

• Market value: $150,000
• Eligible value: $27,600 (state limit)
• Assessed value covered: $6,900 (25% of $27,600)
• Local tax rate: $3.20 per $100 assessed value
• Relief: $6,900 ÷ 100 × $3.20 = $220.80

Example for a disabled veteran:

• Market value: $210,000
• Eligible value: $175,000 (state limit)
• Assessed value covered: $43,750
• Local tax rate: $2.80 per $100 assessed value
• Relief: $43,750 ÷ 100 × $2.80 = $1,225

Some counties and municipalities offer additional local relief or freeze programs. Combine those with state relief to maximize savings.

Application Process

1. Gather documents: Collect proof of age (driver’s license, birth certificate), disability letters, VA statements, income forms (SSA-1099, 1099-R, W-2), and the current tax bill or receipt.
2. Obtain the application: Forms are available from the county trustee, city collecting official, or on the Comptroller’s website. Each parcel requires a separate application.
3. Complete the form accurately: Provide parcel ID, property address, contact information, Social Security numbers, and attach documentation. Indicate whether you are applying as elderly/disabled, disabled veteran, or surviving spouse.
4. Submit to the county trustee: File in person, by mail, or electronically (if offered). Applications must be received by 35 days after the April delinquency date; check with your county because some have earlier deadlines tied to municipal due dates.
5. Pay your taxes: Even if relief is pending, pay the bill by the statutory deadline to avoid interest. Most counties apply the credit immediately, reducing what you owe at the counter. If you already paid in full, the county will issue a refund check once the state reimburses them.
6. Monitor approval: The trustee forwards applications to the Comptroller for review. You’ll receive written notice if documents are missing or if you are denied. Approved applicants typically see the credit within 6-8 weeks.
7. Reapply annually: Eligibility must be recertified each year. Trustees mail renewal postcards to prior recipients. Submit updated income documents and disability certifications; failing to reapply means losing relief for that year.

Documentation Tips

• Use a checklist to ensure every income statement is included. Missing even one document is the top reason for delays.
• Veterans should request updated VA benefit letters each January. The VA’s eBenefits portal allows you to download the necessary documentation instantly.
• If you are recently widowed, bring the veteran’s death certificate and proof of marital status (marriage certificate) to establish surviving spouse eligibility.
• Attach a copy of the paid tax receipt if you submit after paying the bill; this speeds up refund processing.

Timelines and Deadlines

• Property tax bills generally mail in October and are due the last day of February for county taxes. City due dates vary.
• The delinquency date is March 1 for county property taxes. Applications are due within 35 days after the delinquency date (typically early April). Some municipalities have earlier cutoffs—verify with your trustee or collector.
• Disabled veterans returning from deployment can apply retroactively for the tax year in which they were discharged; submit proof of service dates and disability determination.

Coordination With Other Relief

• Tax Freeze Program: Some counties offer a property tax freeze for seniors with incomes below a local limit. The freeze keeps future bills from rising. You can receive both the freeze and state relief simultaneously.
• Local option relief: Municipalities such as Nashville (Davidson County) and Knoxville (Knox County) offer additional credits funded locally. Ask your trustee if a supplemental application is required.
• Mortgage escrow: Provide your mortgage servicer with the approval letter so they adjust escrow. Otherwise, they may continue collecting the higher amount and hold excess funds.
• Utility assistance: If property taxes remain burdensome, pair relief with state-funded utility assistance (LIHEAP) or weatherization programs to reduce overall housing costs.

Strategic Tips

• Apply early: Submit your paperwork soon after bills are issued. Early applications give trustees time to correct errors before the deadline.
• Check income calculations: Include Medicare Part B premiums in income when using SSA-1099 forms; the program counts gross benefit amounts. If your income is near the limit, consult a tax advisor to ensure accuracy.
• Maintain records: Keep copies of your application, supporting documents, and approval letters. This simplifies annual renewals and helps in audits.
• Plan for home transfers: If you place your home in a trust or add a child to the deed, inform the trustee. Ownership changes can disrupt eligibility if not reported.
• Engage with veteran service officers: VSOs can help disabled veterans gather VA paperwork and explore additional benefits like specially adapted housing grants.

Example Households

1. Fixed-income retirees: John and Linda, both 70, live in Blount County on Social Security and a small pension totaling $34,000. Their county tax rate is $2.35 per $100 assessed value. The relief covers $6,900 of assessed value, reducing their bill by $162. They also enroll in the county’s tax freeze, ensuring future increases are capped.
2. Disabled veteran homeowner: Sergeant Williams returned from active duty with a 100% service-connected disability. His Davidson County home carries a $3.40 tax rate. The veteran relief covers $43,750 of assessed value, providing a $1,487 credit. He coordinates with his mortgage servicer to lower escrow payments, freeing up cash flow for medical expenses.
3. Surviving spouse: Mrs. Patel’s husband was killed in action. She remains in their Hamilton County home. By submitting the DD Form 1300 and marriage certificate, she secures the maximum relief, saving approximately $1,200 annually and avoiding financial hardship while raising their children.

Common Mistakes

• Missing the deadline: Trustees cannot accept late applications unless the Comptroller grants a hardship extension. Mark the deadline on your calendar and set reminders.
• Incorrect income reporting: Forgetting to include IRA distributions or part-time wages may trigger denial. Review bank statements to catch overlooked income.
• Failing to reapply: Relief does not auto-renew. Watch for the renewal postcard in January and respond promptly.
• Omitting VA documentation: Veterans must submit updated proof annually. Using an outdated VA letter is a frequent cause of delays.
• Ownership discrepancies: Ensure the property deed reflects the applicant’s legal name. Name mismatches between documents and the deed require correction before approval.

Frequently Asked Questions

Is the relief taxable income? No. The reimbursement is not considered taxable income by the IRS or Tennessee Department of Revenue.

Can manufactured homes qualify? Yes, if the applicant owns the manufactured home and it is assessed and taxed as real property in Tennessee.

What if I move midyear? Relief applies only to the property listed on the application. If you sell or move, notify the trustee. You may apply for the new home the following tax year, provided you meet requirements.

Does the program help with delinquent taxes? Relief applies to current-year taxes only. However, if you are on a payment plan, the credit reduces the balance owed once applied.

Are there audits? Yes. The Comptroller conducts reviews to verify income and residency. Keep documentation for at least three years.

Additional Resources

• Program overview and forms: https://comptroller.tn.gov/boards/state-board-of-equalization/property-tax-relief-program.html
• County trustee directory: https://comptroller.tn.gov/office-functions/pa/property-taxes/county-trustees.html
• VA eBenefits portal for benefit summaries: https://www.va.gov/resources/ebenefits/
• Local assistance for seniors: Tennessee Area Agencies on Aging and Disability (https://www.tn.gov/aging.html)

By filing on time, keeping meticulous records, and coordinating with other relief options, Tennessee homeowners can maintain stable housing costs even as property taxes rise. The program’s annual recertification ensures those most in need keep access to this crucial support.