A years-long state effort to crack down on fraud in a popular property tax deduction hits a crucial deadline next week.
Homeowners who have been claiming the homestead deduction could lose the benefit if they do not file the bright-pink homestead verification form they have been receiving in the mail for the past three years.
“The homestead deduction gives a qualifying individual or couple a substantial property tax benefit,” Brian Bailey, the commissioner of the Indiana Department of Local Government Finance, said in a news release.
“When individuals who do not qualify receive this benefit, it costs other taxpayers more.”
The deduction is for $45,000 or 60 percent of the value of the home, whichever is less, according to the state agency. For the owner of an home assessed at $90,000, the deduction could mean cutting the assessed value in half before property taxes are calculated.
Bartholomew County Auditor Barb Hackman said the Jan. 2 deadline is set by the state for the filing of all deductions; however, this year’s deadline is more important than most years because of the crackdown on homestead deduction fraud.
Hackman said the goal is to allow county auditors to check a central database and revoke unlawful, duplicate homestead deductions.
If a resident claimed homestead deductions on several properties in different counties, for example, county government could recoup underpayments and a 10 percent fee the auditor’s office could keep for further enforcement
However, Hackman said she and other Bartholomew County officials have decided not to try to collect the penalties.
The county first sent the forms to residents in 2010 and has sent them again each year since. About 88 percent of the county’s residents who receive the homestead deduction have filed the pink form, Hackman said.
After the deadline, the county could pull the deductions from those who have yet to file the form.
However, Hackman said the county will go through every effort to avoid that.
A letter will be sent in early January to those who have yet to file the form, and Hackman said the county will wait as long as it can before pulling the deduction, probably until after tax bills are sent to residents in late April.
“I am not going to be that prompt in getting those (removed) right off because if they verify, they qualify. I am going to have to put them right on,” Hackman said.
Even after the deduction is removed, homeowners who believe they qualify for the deduction can come in to the auditor’s office and fill out the form and the bills will be adjusted.
“They will have an opportunity to come in and, if they would still qualify, they would not lose any deduction,” Hackman said.
Since the forms first went out three years ago, some people have forgotten that they already sent the form.
The auditor’s office has received hundreds of calls from people who just want to double-check their status, and of those calls only about 10 were found not to have filed the form already.
Hackman said the form cannot be printed from a state website, nor can information be given to the auditor’s office over the phone, because the state requires the bright-pink form be