Tax Deductions for Homeowners on Disability in North Carolina

North Carolina has several programs available that are designed to lower the property tax bills for disabled homeowners and disabled veterans. North Carolina residents who qualify can apply for and receive tax deductions that will reduce the assessed value of their homes. This results in the property owner having a more affordable property tax bill.

Program for Disabled Homeowners

Each county in North Carolina is responsible for administering the homeowners disability programs. The application forms are available online or at the county tax assessor’s office. The applicant has to complete and file the form only once as long as the eligibility status remains the same. A husband and wife file one application together. If there are multiple owners, each one must file a separate application. The applicant must file the completed form with the tax assessor’s office by June 1 if she wants to receive the deduction for the given year.

Eligibility Qualifications

To be eligible, an applicant must be a North Carolina legal resident who legally owns the property. A free-standing house or a mobile home qualifies if the applicant occupies the dwelling as her permanent residence. The applicant must have a total and permanent disability that has been documented by a North Carolina licensed physician or a government agency such as the Social Security Administration. The applicant’s income cannot exceed the maximum allowable amount for the previous year, which, for 2013, is $28,100. All income sources count toward income except Social Security benefits and gifts.

Property Tax Deduction

An approved applicant is entitled to deduct either the greater of the first $25,000 or 50 percent of the home’s assessed value. For example, if the applicant’s home is assessed for $160,000, she receives an $80,000 tax deduction. The applicant will be taxed on and pay property tax on the remaining $80,000. If the applicant’s home was assessed for $50,000 or less, she would be entitled to the $25,000 deduction. The applicant must maintain her eligibility every year the tax deduction is taken or risk being subjected to tax penalties.

Disabled Veterans Deduction

North Carolina legal residents of any age can apply for the disabled veterans deduction if he or she was honorably discharged from US military service. The homeowner must legally own and occupy the residence. The U.S. Department of Veteran’s Affairs must certify that the veteran is totally and permanently disabled from a service-connected disability. The tax deduction is available for a spouse who has not remarried after the veteran died or if the service member died in the line of duty. The application must be completed and filed no later than June 1 to take the deduction. There is no income cap, and the homeowner’s assessed property value will be reduced by the $45,000 deduction.