LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6551 NOTE PREPARED: Dec 10, 2024
BILL NUMBER: HB 1101 BILL AMENDED:
SUBJECT: Tax Deduction and Credit for Persons 65 or Older.
FIRST AUTHOR: Rep. Abbott BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: GENERAL IMPACT: Local
DEDICATED
FEDERAL
Summary of Legislation: This bill increases, for purposes of the deduction for persons 65 or older:
(1) the adjusted gross income (AGI) threshold for an individual from $30,000 to $40,000;
(2) the combined AGI threshold for an individual filing a joint return with the individual's spouse
from $40,000 to $50,000;
(3) the combined AGI for an individual and all other individuals that are joint tenants or tenants in
common from $40,000 to $50,000; and
(4) the maximum assessed value (AV) of the property subject to the deduction from $240,000 to
$350,000.
The bill also increases, for purposes of the over 65 circuit breaker credit:
(1) the AGI threshold for an individual from $30,000 to $40,000;
(2) the combined AGI threshold for an individual filing a joint return with the individual's spouse
from $40,000 to $50,000; and
(3) the maximum AV of the property subject to the credit from $240,000 to $350,000.
The bill makes conforming changes.
Effective Date: July 1, 2025.
Explanation of State Expenditures:
Explanation of State Revenues:
Explanation of Local Expenditures:
Explanation of Local Revenues: Summary: This bill increases the AV and income limits for qualification
for both the property tax deduction and the tax cap credit available for homeowners that are aged 65 and
over. Each of these provisions will result in a reduction of local revenues due to an increase in property tax
cap losses. The changes relating to the deduction will also cause tax shifts from the taxpayers receiving the
HB 1101 1 deduction to all other taxpayers to the extent that those other taxpayers have not yet reached their tax cap.
Additional Information:
Property Tax Deduction: Beginning with taxes payable in CY 2027, the changes in the AV and income limits
could result in an estimated 17,500 to 46,500 additional taxpayers qualifying for the deduction. The
additional deductions could amount to an estimated $245 M to $651 M in AV, worth about $5.2 M to $13.9
M in taxes to the recipients. Some of these taxes will be shifted to other taxpayers through increased tax
rates, and some will be lost to higher tax cap credits.
[For taxes payable in 2024 under current law, 100,400 taxpayers received the 65 and over deduction totaling
$1.38 B in AV.]
Property Tax Credit: Beginning with taxes payable in CY 2027, the changes in the AV and income limits
could result in an estimated 12,000 to 31,800 additional taxpayers qualifying for the credit. This credit limits
the growth in net property tax bills to 2% per year. At least initially, the credits will be minimal but will
increase over time.
[For taxes payable in 2024 under current law, 68,800 taxpayers received 65 and over tax cap credits totaling
$31.4 M in taxes.]
State Agencies Affected:
Local Agencies Affected: County auditors; Civil taxing units and school corporations.
Information Sources: LSA's property tax database; LSA’s income tax database.
Fiscal Analyst: Bob Sigalow, 317-232-9859.
HB 1101 2