Tardy homeowners face bigger tax bite

November 13, 2012 8:45 pm • By Bill Dolan bill.dolan@nwi.com, (219) 662-5328

Frequently asked questions

Specific questions about property tax deduction eligibility or the homestead verification form should be directed to the county auditor. Additional information is available on the Indiana Department of Local Government Finance’s website at http://www.in.gov/dlgf/8455.htm.

Frequently asked questions:

Q. My property is not my primary residence and I am not claiming the homestead deduction on this property. Do I need to complete the form for this property?

A. You only need to complete the form if the property is your primary residence and you are currently claiming the homestead deduction on the property. For example, if the property is a rental or second residence, the form does not need to be completed for that property.

Q. My property is my primary residence, but I have not been claiming the homestead deduction. What do I do?

A. If you wish to begin claiming the homestead deduction on the property (and are not receiving homestead benefits on any other property), you should complete an application for the deduction and file it with the county auditor.

Q. My property is not my primary residence. However, I just realized that I have been receiving the homestead on this property. What should I do?

A. You should notify the county auditor immediately and have the deduction removed from the property.

Q: I filed a Homestead Verification Form in 2010. In the last year, I sold that residence and purchased a new home and am receiving a homestead deduction on the new home. Do I need to re-file the Homestead Verification Form?

A. Yes, because this is a different homestead from the first one. You should have received a pink form with your tax bill in 2012. If you did not receive the pink form, you should contact your county auditor to complete one before the end of 2012.

Q. I don’t have a driver’s license or Social Security number. What should I provide on the verification form?

B. If you or your spouse (if any) does not have a driver’s license or Social Security number, the last five digits of a state identification number or the last five digits of a control number on a document issued by the federal government such as a passport or work visa may be provided instead. These numbers are acceptable only if an individual legitimately does not have a driver’s license or Social Security number and must be accompanied by an explanation of the type of number provided (i.e., passport number, work visa, state identification number).

Q. My driver’s license is from another state. Can I provide the last five digits of this number?

A. Yes. You are not required to provide an Indiana driver’s license or identification card to receive the homestead deduction. However, if you provide out-of-state identification, the county auditor may request additional information to prove the Indiana property is your primary residence.

Q. I am married but my spouse is not an owner of the property. Does my spouse need to provide the last five digits of his or her Social Security and driver’s license numbers?

A. Yes. A married couple is limited to one homestead deduction regardless of living arrangements or property ownership. Therefore, the identification numbers of both spouses are required. Only if a couple is legally divorced would both individuals be eligible for a homestead deduction.

Q. How will my identification numbers be used?

A. Your identification numbers will be used by county auditors to prevent homestead fraud. Your numbers will be entered into a secure homestead database that allows county auditors to track homesteads statewide and ensure that each individual or married couple is claiming only one homestead deduction.

Q. What happens if I do not complete the form?

A. Your homestead deduction can be removed beginning with the 2012-pay-2013 property tax bills if you do not return a completed form to the auditor on or before Dec. 31, 2012. You must have completed the homestead verification form at least once in 2010, 2011 or 2012. If you have not completed and returned the form after the 2012 tax bills are mailed, you will receive a final notification letter from the county auditor requesting verification and identification numbers.

Q. What is the penalty for falsely claiming a homestead deduction?

A. If a taxpayer fails to notify the appropriate county auditor of his or her ineligibility for the homestead deduction, the taxpayer will be liable for any additional taxes that would have been due on the property, plus a 10 percent civil penalty

CROWN POINT | Some 38,000 Lake and Porter county homeowners have only a few weeks left to avoid a large property tax increase in 2013 by completing their homestead verification forms.

Jenny Banks, spokeswoman for the Indiana Department of Local Government Finance, reminds area residents the deadline is Dec. 31 to comply with a state law created to ensure ineligible property owners aren't abusing the tax credit system and increasing the burden on law-abiding taxpayers of supporting local government.

The credit is only available for an individual or married couple's primary residence, which is defined as the owners' permanent home. Vacation homes and rental properties are ineligible for the credit, which reduces a property's assessed value by as much as $45,000 in addition to a supplemental deduction.

The two county auditor's offices have been sending out pink one-page forms the last three years to all property owners. The owners must provide their names, addresses, Social Security numbers, driver's licenses or state-issued identification card number, passport or work visa and sign the form, certifying they are eligible for credit.

Lake Auditor Peggy Katona said about 30,000 Lake owners have yet to file their paperwork. Porter Auditor Robert Wichlinski said he is still waiting to hear from about 8,000.

Those who fail to respond can lose their credit and face a stiff tax increase when the new bills come out next year.

Although the verification program ends Dec. 31, Katona said Tuesday she doesn't want to punish those with legitimate reasons for filing late and will give property owners until the end of January to provide documents.

She said she cannot delay longer and still get tax bills out in time.

Wichlinski said Tuesday although the spirit of the law dictates the deletion of credits immediately in 2013, he will wait for directives from the state after Gov.-elect Mike Pence takes office next year. "Otherwise all our work could be for naught," he said.