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June 22, 2006
TIME RUNNING OUT FOR REFUNDS
June 30 is the final day to file for a refund for the 2002 Capital Gains Abatement with the Department of Revenue. A recently passed law that changed the effective date of a tax rate increase on long-term capital gains will result in refunds for thousands of taxpayers. Any taxpayer who had a capital gains transaction between May 1 and December 31, 2002 may be entitled to a refund. Normally, the statute of limitations would have expired on April 15, 2006 but it has been extended to June 30, 2006 to claim this refund.
WHO IS ELIGIBLE: To find out if you are eligible, look at your 2002 Massachusetts income tax return and see if you paid any tax on capital gains. The amount of tax, if any, that you paid on your 2002 tax return is located on Form 1, page 2, line 24
HOW
DO I GET MY REFUND: You can
file online or file a paper return. For those wanting to file online, go to
http://www.dor.state.ma.us/ and follow the prompts. Those wanting to file on
paper must complete form CA-6 along with a recalculated long term gain
schedule.
Another matter that seniors should be aware of is that the Massachusetts budget is in it’s final stage. The Conference Committee is reviewing both the House and Senate budget to make a compromise. The issue they are deciding is; How much money may a husband and wife keep, if one of them needs nursing home care? This is known as the Community Spouse Resource Allowance (CSRA). Prior to 2003 if one spouse needed nursing home care, the spouse living at home could keep all of their money, up to about $90,000. Now the rule says you may only keep all of your assets if they amount to less than $19,908. If you have more than that, you get to keep half, up to $99,540, the current year, indexed for inflation amount.
For many years Massachusetts allowed the maximum allowance for the CSRA. In 2003, then Governor Swift used her 9B powers to cut the CSRA to the minimum federal amount, $19,908. We are hoping that the Conference Committee returns us to the rule in place prior to 2003.
I am urging all seniors to call their Senators and Representatives and ask them to contact their members of the Conference Committee to ask that they support restoring the Community Spouse Resource Allowance to it’s pre-2003 status.
This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).
Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds Masters in accounting and a Masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org