Increasing housing values and associated property taxes can price older people out of the homes they have lived in for decades, separating them from their neighbors and communities. Similarly, rising costs can make accessible housing unaffordable for Missourians with disabilities. The property tax relief offered by the Missouri “circuit breaker” property tax credit helps older Missourians and Missourians living with disabilities who have fixed incomes stay in their homes by offsetting costs related to property taxes. Though a modest amount, the credit is a critical lifeline for 131,145 households throughout the state.
However, it has not been adjusted since 2008, limiting its reach and impact. Missouri lawmakers could strengthen the circuit breaker by expanding income eligibility, increasing the credit amount, and indexing the credit and eligibility to keep pace with inflation.
Circuit Breaker Basics
A “circuit breaker” tax credit provides property tax relief to low-income households that spend a high proportion of income on property taxes. Like an electrical circuit breaker, it kicks in when a property tax bill goes over a certain percentage of a taxpayer’s income. As of 2019:
- 31 states (including Missouri) provided some type of a circuit breaker tax credit.
- 22 states extend the credit to renters, recognizing that property owners pass on the cost of property taxes to tenants through rent increases.
Missouri’s version of the “circuit breaker,” known as the Missouri Property Tax Credit, is available to both homeowners and renters and is based on the amount of property tax or rent paid and household income.
- The maximum credit is $750 for renters and $1,100 for owners. The actual credit is based on the amount of property tax or rent paid and total household income.
- While Missouri’s Circuit Breaker is a lifeline for many older adults and people living with disabilities, only very low-income recipients (those with incomes below $14,300) qualify for the maximum credit.
- In 2021 the average credit was just $602.
Income Limits
Renters: Single ≤ $27,500, Married ≤ $29,500
Homeowners: Single ≤ $30,000, Married ≤$34,000
Eligibility
Must be 65 years of age or older, a person 18-64 who is 100% disabled, or 60+ and receiving surviving spouse social security benefits.
Those renting from a facility that does not pay property taxes (such as a non-profit assisted living facility) are not eligible.
Shortcomings of the Credit
Current statutory constraints limit the reach and impact of the circuit breaker.
- Although property taxes increase annually, the size of Missouri’s circuit breaker credit is flat and is not tied to any annual increase.
- The size of the tax credit phases out quickly so that those near the income eligibility cap receive credits of less than $10 annually.
- While average incomes increase over time, Missouri’s income eligibility guidelines are not adjusted for inflation. As a result, fewer people qualify for the credit over time and those that do tend to fall higher on the phase-out scale – meaning they qualify to receive a smaller credit.
Strengthening the Circuit Breaker Property Tax Credit
Missouri’s circuit breaker was originally approved in 1973 and has not been adjusted since 2008.
- As a result, income guidelines and credit amounts have fallen behind even inflationary increases.
- Recent trends in housing costs and associated property tax increases are making it even harder for older adults and Missourians with disabilities to remain independent in their own homes.
To meet this need, Missouri lawmakers could strengthen the circuit breaker by expanding income eligibility, increasing the credit amount and indexing the credit and eligibility to keep pace with inflation.
Specifically, the following changes would modernize the circuit breaker and account for inflation since 2008:
Increase the Maximum Income Limit
- Single renters from current cap of $27,500 to $38,200, and married renters from $29,500 to $41,000
- Single owners from current cap of $30,000 to $42,200, and married owners current cap of $34,000 to $48,000
Increase the Maximum Credit
- To $1,055 for renters (from current limit of $750)
- To $1,550 for owners (from the current limit of $1,100)
Modify the phaseout increment to ensure recipients are reimbursed for a larger portion of their property taxes
Index both the income limits and the maximum credit to inflation to ensure that the circuit breaker keeps pace with the rising cost of property over time.
Proposed Circuit Breaker Improvements Would Benefit 142,000 Households
| Income Group | Lowest 20% | Second 20% | Middle 20% |
| Income Range | Less than $22,000 | $22,000 – $40,000 | $40,000 – $66,000 |
| Average Income | $13,000 | $30,000 | $52,000 |
| Average Increase in Circuit Breaker Tax Credit for Recipients | $186 | $336 | $320 |
Circuit Breaker Property Tax Credit Reaches Missourians in Every County
Tax Year 2021 Claims by County
| County | Total Claims | Total Benefits | Average Benefit |
|---|---|---|---|
| Adair | 610 | $331,160 | $543 |
| Andrew | 251 | $134,605 | $536 |
| Atchison | 141 | $82,073 | $582 |
| Audrain | 548 | $294,875 | $538 |
| Barry | 896 | $501,387 | $560 |
| Barton | 365 | $196,169 | $537 |
| Bates | 310 | $153,871 | $496 |
| Benton | 684 | $357,353 | $522 |
| Bollinger | 337 | $173,060 | $514 |
| Boone | 2,422 | $1,461,572 | $603 |
| Buchanan | 2,246 | $1,239,563 | $552 |
| Butler | 1,514 | $858,362 | $567 |
| Caldwell | 171 | $96,908 | $567 |
| Callaway | 684 | $402,123 | $588 |
| Camden | 721 | $411,110 | $570 |
| Cape Girardeau | 1,869 | $1,086,600 | $581 |
| Carroll | 222 | $113,198 | $510 |
| Carter | 177 | $87,177 | $493 |
| Cass | 1,507 | $933,542 | $619 |
| Cedar | 366 | $192,132 | $525 |
| Chariton | 159 | $79,193 | $498 |
| Christian | 1,585 | $998,631 | $630 |
| Clark | 121 | $57,542 | $476 |
| Clay | 3,285 | $2,074,195 | $631 |
| Clinton | 340 | $204,483 | $601 |
| Cole | 1,111 | $661,450 | $595 |
| Cooper | 486 | $275,923 | $568 |
| Crawford | 780 | $428,454 | $549 |
| Dade | 190 | $95,732 | $504 |
| Dallas | 452 | $236,051 | $522 |
| Daviess | 173 | $89,504 | $517 |
| Dekalb | 178 | $89,234 | $501 |
| Dent | 447 | $220,326 | $493 |
| Douglas | 372 | $171,353 | $461 |
| Dunklin | 1,214 | $691,220 | $569 |
| Franklin | 2,341 | $1,421,881 | $607 |
| Gasconade | 355 | $192,937 | $543 |
| Gentry | 197 | $110,320 | $560 |
| Greene | 7,134 | $4,445,244 | $623 |
| Grundy | 330 | $167,960 | $509 |
| Harrison | 242 | $128,862 | $532 |
| Henry | 748 | $403,278 | $539 |
| Hickory | 247 | $113,013 | $458 |
| Holt | 91 | $49,254 | $541 |
| Howard | 227 | $132,995 | $586 |
| Howell | 1,213 | $619,652 | $511 |
| Iron | 358 | $198,735 | $555 |
| Jackson | 13,960 | $8,825,137 | $632 |
| Jasper | 2,935 | $1,615,123 | $550 |
| Jefferson | 4,736 | $3,012,679 | $636 |
| Johnson | 723 | $433,503 | $600 |
| Knox | 105 | $48,584 | $463 |
| Laclede | 1,055 | $549,473 | $521 |
| Lafayette | 591 | $359,679 | $609 |
| Lawrence | 959 | $527,894 | $550 |
| Lewis | 90 | $44,432 | $494 |
| Lincoln | 819 | $466,708 | $570 |
| Linn | 290 | $149,419 | $515 |
| Livingston | 421 | $225,699 | $536 |
| Macon | 329 | $164,328 | $499 |
| Madison | 510 | $289,650 | $568 |
| Maries | 187 | $96,912 | $518 |
| Marion | 754 | $412,775 | $547 |
| Mcdonald | 270 | $139,931 | $518 |
| Mercer | 90 | $45,424 | $505 |
| Miller | 658 | $350,968 | $533 |
| Mississippi | 424 | $217,661 | $513 |
| Moniteau | 262 | $144,649 | $552 |
| Monroe | 156 | $76,260 | $489 |
| Montgomery | 252 | $143,584 | $570 |
| Morgan | 511 | $260,207 | $509 |
| New Madrid | 575 | $308,322 | $536 |
| Newton | 1,156 | $636,687 | $551 |
| Nodaway | 394 | $213,405 | $542 |
| Oregon | 301 | $125,207 | $416 |
| Osage | 167 | $92,862 | $556 |
| Ozark | 259 | $122,339 | $472 |
| Pemiscot | 753 | $445,304 | $591 |
| Perry | 486 | $281,035 | $578 |
| Pettis | 1,196 | $678,560 | $567 |
| Phelps | 982 | $554,179 | $564 |
| Pike | 349 | $190,522 | $546 |
| Platte | 818 | $522,577 | $639 |
| Polk | 808 | $444,301 | $550 |
| Pulaski | 621 | $347,701 | $560 |
| Putnam | 140 | $69,382 | $496 |
| Ralls | 191 | $100,632 | $527 |
| Randolph | 595 | $334,267 | $562 |
| Ray | 367 | $206,901 | $564 |
| Reynolds | 142 | $65,707 | $463 |
| Ripley | 290 | $147,316 | $508 |
| Saline | 529 | $293,144 | $554 |
| Schuyler | 59 | $28,959 | $491 |
| Scotland | 87 | $41,299 | $475 |
| Scott | 1,273 | $731,584 | $575 |
| Shannon | 208 | $85,154 | $409 |
| Shelby | 132 | $61,250 | $464 |
| St. Charles | 4,034 | $2,483,280 | $616 |
| St. Clair | 236 | $116,547 | $494 |
| St. Francois | 2,508 | $1,477,725 | $589 |
| St. Louis City | 13,237 | $8,453,223 | $639 |
| St. Louis County | 18,768 | $12,980,140 | $692 |
| Ste. Genevieve | 352 | $192,257 | $546 |
| Stoddard | 998 | $556,739 | $558 |
| Stone | 610 | $324,407 | $532 |
| Sullivan | 136 | $68,277 | $502 |
| Taney | 1,351 | $748,766 | $554 |
| Texas | 493 | $242,987 | $493 |
| Vernon | 608 | $325,982 | $536 |
| Warren | 542 | $312,591 | $577 |
| Washington | 547 | $269,525 | $493 |
| Wayne | 369 | $176,244 | $478 |
| Webster | 783 | $437,802 | $559 |
| Worth | 30 | $13,270 | $442 |
| Wright | 576 | $255,420 | $443 |
