Iowa assessors struggle to verify seniors’ age for new tax break

A rush to enact new property tax breaks for Iowa seniors has led to confusion and concerns of fraud among county and city assessors, who say they are struggling to verify applicants’ age.

Iowa seniors can begin applying for a new property tax break created by legislation signed into law three weeks ago by Gov. Kim Reynolds.

⧉ Related article: Iowa seniors, veterans can apply for new property tax break. Here’s how.

The new property tax law, House File 718, was approved with near-unanimous support in the Iowa Legislature during the last days of the legislative session.

The law took effect immediately and provides a $3,250 exemption on the taxable value of a home owned and lived in by Iowans age 65 and older. The exemption applies for the assessment that began Jan. 1 that would have associated taxes due in fall 2024 and spring 2025. The homestead property tax exemption then increases to $6,500 for the 2024 assessment year.

In order to claim the new tax exemption, seniors must file applications with their local assessor offices on or before July 1.

The Iowa Department of Revenue last week amended an existing homestead tax credit exemption form to allow seniors to also apply for the new exemption. To claim the new exemption, applicants must provide their date of birth and certify information on the form is correct.

However, ambiguity in guidance provided by the Revenue Department — as well as the quick timeline for implementation — has caused confusion and consternation among assessors over what documents they can request and examine from Iowans to verify they’re 65 or older and qualify for the tax break, said Linn County Assessor Jerry Witt.

Witt said his office has been inundated with calls, email, letters and in-person questions from seniors about the new property tax exemption.

“The media a good job of getting the word out and we’re doing what we can to try to simplify” the process, Witt said. “It doesn’t seem to be going the best, so far.”

Witt said his office was given permission by the Department of Revenue to automatically approve Iowa seniors currently receiving the homestead tax credit to also receive the new exemption — so long as they can verify that they’re 65 or older.

However, Department of Revenue Deputy Administrator Jon Wolfe in a memo to assessors and auditors responding to questions wrote that they are “not allowed to require any additional documentation not on the form” to verify age eligibility.

“Additionally, several of you have inquired about requiring additional documentation to verify age eligibility (such as a driver’s license),” Wolfe wrote. “You are not allowed to require any additional documentation that is not requested on the form. The Homestead form does not require any additional documentation, nor does chapter 425, subchapter I require additional documentation.”

Witt, the Linn County assessor, and others interpreted that to mean they were prohibited from verifying an applicant’s age, sparking concerns that many younger Iowans who do not quality will take advantage.

A spokesperson for the Department of Revenue clarified to The Gazette on Wednesday that assessors can ask for a photo ID — but cannot reject an application if one was not provided. Additionally, the Iowa Secretary of State recently issued an opinion stating that assessors may use voter registration lists to determine the age of property owners qualifying for the new exemption.

“The assessor can use other available data to verify age and there is nothing preventing the assessor from examining a document such as a driver's license,” said Department of Revenue spokesman John Fuller. “They just cannot recommend disallowance or refuse to accept a claim because the claimant doesn't provide additional documentation not required by law.”

Fuller said documentation requirements to establish age eligibility for the new homestead exemption are consistent with other property tax credit programs that have been in operation for years. He gave the example of the Elderly Credit Homestead program, which has age-based eligibility requirements and requires an attestation to establish age eligibility.

Witt and other Iowa assessors, however, say they’re concerned about fraud, particularly with applications submitted electronically in an email. Iowans who file a fraudulent claim are subject to a 25 percent penalty plus interest.

Given the ease of verification of ownership through property tax records “and the availability of claimant age in other data sets, it is unlikely that there will be systemic fraud,” Fuller said.

Cross referencing property records with voter records, however, is not as straightforward as it may seem, Witt said.

“You have two different sets of data used for two completely different purposes, and it’s difficult to match up,” he said, adding not all Iowans are registered to vote.

Wolfe, the Revenue Department deputy administrator, in his memo wrote that “because of the short timeline for implementation, we are concerned about possible unintended consequences of making more substantive changes without careful consideration.”

Witt said assessors are frustrated by state lawmakers asking local officials to immediately implement the legislation with little time to adjust and educate the public.

“Hopefully, legislators will have an open ear“ next year to passing changes to make the law more workable, he said. But while there have been hiccups, overall, Witt said the process “has been positive.”

“People are patient and extremely nice and thankful … they do get this relief,” he said.

Comments: (319) 398-8499; tom.barton@thegazette.com