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DMVA proposes simpler income test for disabled veterans' property tax exemption; agency estimates ~$96M in relief
Summary
DMVA told the committee it will change the income definition for the disabled veterans real estate tax exemption from 'gross income' to 'federal adjusted gross income,' aiming to simplify applications; the department estimated the exemption provides roughly $96,000,000 a year in tax relief to about 28,000 beneficiaries.
Jeff King, director of the Bureau of Veterans Programs, told the committee the department proposed shifting the eligibility income definition for the disabled veterans real estate tax exemption from gross income to federal adjusted gross income to reduce paperwork and let applicants rely primarily on the two-page IRS Form 1040. “This allows applicants to take advantage of all the above-the-line exemptions and deductions offered in the federal tax code, and it simplifies and streamlines both the application and adjudication procedures,” King said.
King said the program currently covers just over 28,000 disabled veterans and surviving spouses and that, by applying Pennsylvania's median real estate tax, the agency estimates the exemptions total around $96,000,000 a year in tax relief. Committee members raised questions about multi-unit owner-occupied properties and deeded ownership; DMVA responded that eligibility depends on the deed holder and noted county assessment offices historically varied in interpretation, which the regulation and an accompanying administrative guide aim to reduce. The department cited Commonwealth Court precedent (Vanderheff v. Susquehanna County Board of Assessment Appeals, 2008) limiting counties' authority to apportion the exemption.
