What is a “circuit breaker” tax?

A “circuit breaker” tax is a type of property tax relief for low-income homeowners in California. This tax relief is determined by the homeowner’s income. It is available to eligible homeowners who are at least 55 years old, or at least 60 years old for joint filers, and whose household income is below the California Franchise Tax Board’s maximum income levels. The circuit breaker works like a fixed discount on property taxes. When a qualified homeowner files their property taxes, the franchise tax board subtracts a certain amount from the taxes they owe based on their income. This amount is usually 10-15% of the taxes due. The discount varies based on their total household income and their filing status. When the home owner’s income is lower, they may qualify for a larger discount. The circuit breaker tax provides an important financial assistance to California’s elderly homeowners and other low-income households. This tax relief can help them stay in their homes and keep up with their local property taxes. It also helps support California’s schools, libraries, and other public services that rely on property taxes.

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What is a “circuit breaker” tax?

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