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Mr. and Mrs. Woodward, an elderly couple with no dependents, have taxable source income of $8,000 and Social Security income of $26,000. They own property assessed at $80,000 (current market value of $190,000) and are subject to a property tax rate of $5/$100 of assessed value. They each receive an old-age property tax exemption of $500. They are eligible for the state property tax circuit breaker. The relief threshold is 6 percent of total money income; 25 percent of any overload is returned by the state in an income tax credit. Maximum relief paid is $600 per couple.
a. What property tax would they pay without circuit breaker relief?
b. For how much circuit breaker relief are they eligible?
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