Assessor Manual, Exemption Administration: RPTL Section 459-c

Exemption Administration Manual—Part 1: Residential—Other than multiple dwellings

Section 4.01 - RPTL Section 459-c: Persons with disabilities and limited incomes

Exemption code:

4193_

Year originally enacted:

1997

Related statutes:

Pub Hel L §2801, RPTL §§455, 467

Summary:

If allowed by local option, property that (1) is owned by one or more persons with disabilities; by spouses or by siblings, at least one of whom has a disability and whose income, as defined under Ownership Requirements below, is limited by reason of such disability, and (2) is used exclusively for residential purposes is partially exempt from general municipal taxes. Unless allowed by local option, no exemption may be granted by a school district to property where a resident child attends a public elementary or secondary school. No exemption is allowed from special ad valorem levies or special assessments.

In addition, an owner of property that satisfies all of the exemption requirements except the income ceiling may be eligible for a reduced exemption from general municipal and school district taxes (see Calculation of Exemption below).

Eligibility requirements

Ownership requirements:

Property must be owned by one or more persons with disabilities, or by spouses or by siblings, at least one of whom has a disability. A person with a disability is one who has a physical or mental impairment, not due to current use of alcohol or illegal drug use, which substantially limits such person's ability to engage in one or more of the major life activities, such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working, and who (1) is certified to receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits under the Federal Social Security Act, (2) is certified to receive Railroad Retirement Disability benefits under the Federal Railroad Retirement Act, (3) has received a certificate from the State Commission for the Blind and Visually Handicapped stating that such person is legally blind, (4) is certified to receive a United States Postal Service disability pension, (5) is certified to receive a United States Department of Veterans Affairs disability pension under Title 38, Section 1521 of the United States Code, or (6) has received an order from the Workers' Compensation Board awarding compensation based on either a permanent total disability or permanent partial disability. Siblings must have at east one parent in common. Siblings can be biological children or adoptive children of the parent. If the property is held in trust, the exemption may be allowed if the beneficiary of the trust qualifies. 

Note: When the property is owned by one or more persons, some of whom qualify for this exemption and the others of whom qualify for the senior citizens' exemption provided by RPTL §467, the owners have the option of choosing the more beneficial exemption. The owners may not be prohibited from taking one of these two exemptions solely because the owners qualify for more than one exemption.

Income requirements:

To qualify for the base exemption (50% of assessed value), the combined incomes of the owners for the applicable income tax year (see Time requirement below) must not be greater than the maximum income eligibility level specified by local law. Such maximum income levels may range from $3,000 to $50,000. If title to the property is solely in a spouse's name, the incomes of both spouses must be combined to satisfy the income requirement, even if both do not reside on the property. An exception is made in the case of certain separated spouses: where a spouse or ex-spouse is absent from the property as a result of divorce, legal separation, or abandonment. In such cases, only the income of the spouse or ex-spouse residing on the property is to be considered in determining eligibility for exemption.

Municipalities that have elected to allow the base exemption may amend such local laws or resolution to increase the maximum income eligibility level in accordance with the sliding-scale provisions described under Calculation of Exemption below.

Income is defined as the federal adjusted gross income (FAGI) as reported on the applicant’s federal form 1040 tax return(s) and subject to the following revisions: 

• Social Security benefits not included in the applicant’s FAGI are considered income, except where a locality has opted to exclude them from income. 
• Distributions from an individual retirement account or individual retirement annuity included in the applicant’s FAGI are not considered income, except where a locality has opted to include them in income. 
• Medical and prescription drug expenses of an owner that were actually paid for and not reimbursed or paid by insurance may be deducted from income where a locality has opted to allow them to be deducted. 
• Any tax-exempt interest or dividends that were not included in the applicant’s FAGI is considered income. 
• The net amount of loss claimed on federal Schedule C, D, E, F, or any other separate category of loss cannot exceed $3,000, and the total amount of all losses claimed cannot exceed $15,000.
• If an owner is an inpatient in a residential health care facility (defined by Public Health Law §2801), the amount paid for care at the facility by that owner (or by that owner’s spouse or co-owner) may be deducted from income (see property use requirement). 

For more information on the revisions to income that may be enacted as local options, see local option below.

Proof of income

If any owner, or the spouse of any owner, filed a federal income tax return for the applicable income tax calendar year, a copy of the return must be submitted with the application.

If they do not have a copy of their previously filed return, it may be obtained from the District Office of the Internal Revenue Service (IRS) in which the return is filed. The applicant(s) may still file their application for exemption but must provide their assessor’s office a copy as soon as they receive it from the IRS.

Applicants who were not required to file a federal income tax return for the applicable income tax year must submit Form RP-459-c-Wkst with their application, including any documentation as instructed by Form RP-459-c-Wkst.

Additional proof of income or deductions may be requested as necessary.

For detailed line-item instructions and income calculation please see:

• Guidance on 459-c and 467 income determinations for income tax filers
• Guidance on 459-c and 467 income worksheets for non-filers

Property location requirements:

None. 

Property use requirements:

Property must be used exclusively for residential purposes. If only a portion of the property is used exclusively for residential purposes, only that portion is entitled to exemption; the remainder of the property is taxable. In addition, the property must be the legal residence of and occupied in whole or in part by the disabled person. A disabled person who is absent from the property while receiving health-related care as an inpatient of a residential health care facility (defined by Public Health Law §2801 as a nursing home or other facility providing health-related services) is considered to be a legal resident and occupant of the property.

Unless allowed by local option, no exemption from school district taxes may be allowed if a child who attends public elementary or secondary school (Grades K-12) resides on the property (see Local option).

Certification by state or local government:

Applicant must provide proof of disability with an award letter from the Social Security Administration, the Railroad Retirement Board, the United States Postal Service, or the United States Department of Veterans Affairs, a certificate from the State Commission for the Blind and Visually Handicapped, or an order from the Workers' Compensation Board awarding compensation based on a permanent total disability or permanent partial disability.

Required construction start date or other time requirement:

Applicable income tax year

In localities where the taxable status date is before April 15, the applicable income tax year is the second most recent calendar year. In localities where the taxable status date is on or after April 15, the applicable income tax year is the most recent calendar year. However, for fiscal year income tax return filers, the applicable income tax year is the fiscal year shown on their most recent return.

If an applicant is not required to file a return, their income must still be determined using the amounts for the applicable income tax year specified above (e.g., the second most recent calendar year where the taxable status date is before April 15, the most recent calendar year elsewhere).

Local option

Yes.

Exemption and maximum income:

Each county, city, town, village and school district may choose (1) whether or not to allow the base (50%) exemption and (2) the amount of the maximum income exemption eligibility level (see Ownership Requirements above). The option to exempt must be exercised through adoption of a local law or school district resolution (after a public hearing). In addition, each county, city, town, village, and school district which has chosen to allow the base exemption may choose to permit an increase in the maximum income exemption eligibility level and a corresponding decrease in the percentage of exemption.

Sliding scale of exemption:

Local legislation authorizing the base exemption may be amended or new legislation adopted to allow, for each $1,000 increase in income, a reduced exemption ranging from 45% to 35% of assessed value, and for each further $900 increase in income, a reduced exemption ranging from 30% to 5% of assessed value.

Social Security benefits:

Municipalities that have elected to allow the exemption may, after a public hearing, adopt a local law, ordinance, or resolution providing that any Social Security benefits that were not included in the applicant’s FAGI shall not be considered income. 

IRA distributions:

Municipalities that have elected to allow the exemption may, after a public hearing, adopt a local law, ordinance, or resolution providing that distributions received from an individual retirement account or individual retirement annuity that were included in an applicant’s FAGI shall be considered income.

Unreimbursed medical expenses:

Municipalities that have elected to allow the exemption may, after a public hearing, adopt a local law, ordinance, or resolution offsetting the applicant’s income by all medical and prescription drug expenses they actually paid, that were not reimbursed or paid for by insurance. 

Permanent partial disability:

Municipalities that have elected to allow the exemption may, after a public hearing, adopt a local law or resolution establishing an adjustment percentage for exemptions based on permanent partial disability. The adjustment percentage so established may be between 50% and 100%, inclusive, and shall be applied to the exemption percentage that would otherwise apply. For example, if applicants whose incomes are below the locally-set maximum are generally entitled to a 50% exemption, and a municipality has established an adjustment percentage of 75% for applicants with permanent partial disabilities, then such applicants would be entitled to a 37.5% exemption (75% of 50%) if their incomes were below the locally-set maximum. The same percentage adjustment would apply to the “sliding scale” exemptions, if locally authorized. 

Child in public school:

School districts that have elected to allow the exemption may also adopt a separate resolution to allow the exemption on property where a resident child attends a public elementary or secondary school (Grades K-12). However, the school district resolution authorizing the exemption must provide that satisfactory proof is required that the child was not brought into the residence primarily for the purpose of attending a particular school within the district.

Cooperative apartment:

A local government may enact a law to allow that portion of a cooperative apartment corporation held by an otherwise eligible tenant/stockholder to be eligible for an exemption from real property taxes. If allowed, the amount of the exemption must be determined by the assessor, based upon the proportion of the outstanding stock held by the eligible shareholder, and credited against the taxes charged to the corporation. Eligible stockholders would receive an adjustment to their monthly maintenance fees by the cooperative apartment corporation to reflect the benefit of the exemption. 

Limitation on exemption

*If allowed by local option.

Payments in lieu of taxes

None required. 

Calculation of exemption

General municipal and school district taxes:

Percent of Exemption Based on Income Eligibility (I.E.)

Base exemption:

50% of assessed value.

Sliding-scale income/exemption option:

Percentage of assessed value is determined according to the following schedule.

• More than M but less than M + 1000 = 45% of exemption
• M + 1,000 or more, but less than M +2,000 = 40% exemption
• M + 2,000 or more, but less than M + 3,000 = 35% exemption
• M + 3,000 or more, but less than M +3,900 = 30% exemption
• M + 3,900 or more, but less than M +4,800 = 25% exemption
• M + 4,800 or more, but less than M + 5,700 = 20% exemption
• M + 5,700 or more, but less than M + 6,600 = 15% exemption
• M + 6,600 or more, but less than M + 7,500 = 10% exemption
• M + 7,500 or more, but less than M + 8,400 = 5% exemption

Where M equals the maximum income eligibility level for the base (50%) exemption.

Any such exemptions allowed by local law must be computed after all other partial exemptions except School Tax Relief (STAR) exemptions have been subtracted from the assessed value of the property.

Exemption for Eligible Tenant/Shareholders of Cooperative Apartment Corporations

Exemption = Assessed Value x (n/N) x (I.E.)

• n = number of shares owned by eligible senior citizens
• N = total number of corporation shares
• I.E. = percent of exemption due to income eligibility determined in Percentage of exemption based on income eligibility

Special Ad Valorem Levies and Special Assessments:

No exemption allowed. 

Assessment Roll Section

Taxable (RPS Section 1).

Filing requirements (owner or occupant of property)

Initial application:

File Form RP-459-c, Application for Exemption for Persons with Disabilities and Limited Incomes

Renewal:

File Form RP-459-c-Rnw, Renewal Application for Exemption for Persons with Disabilities and Limited Incomes

Note: Proof of permanent disability need be submitted only in the year of the initial application or, if necessary, in the year following the determination of a permanent disability. 

Reporting requirements (assessor)

At least 60 days prior to the appropriate taxable status date, the assessor must mail to each person who was granted this exemption on the latest assessment roll an application form and a notice that such application must be filed on or before taxable status date and be approved in order for the exemption to be continued to be granted.

Note: Failure to mail such an application or the failure of such person to receive the same does not prevent the levy, collection and enforcement of the payment of taxes on the property owned by such person.

Similar exemptions

• RPTL §467-d, Certain living quarters constructed to be occupied by a senior citizen or disabled individual
• RPTL §459-b, Disabled crime victims
• RPTL §459-a, Improvements to property pursuant to the Americans with Disabilities Act of 1990
• RPTL §459, Physically disabled
• RPTL §467-f, Protective and safety devices installed in multiple dwellings in New York City 

Exemption application forms

• RP-459-c
• RP-459-c-I
• RP-459-c-Rnw
• RP-459-c-Wkst

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