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Improving the Circuit Breaker Property Tax Credit Helps Seniors, Missourians with Disabilities Stay in Their Homes

Increasing housing values and associated property taxes can price older people out of the homes they have lived in for decades, separating them from their neighbors and communities. Similarly, rising costs can make accessible housing unaffordable for Missourians with disabilities. The property tax relief offered by the Missouri “circuit breaker” property tax credit helps older Missourians and Missourians living with disabilities who have fixed incomes stay in their homes by offsetting costs related to property taxes. Though a modest amount, the credit is a critical lifeline for 131,145 households throughout the state.

However, it has not been adjusted since 2008, limiting its reach and impact. Missouri lawmakers could strengthen the circuit breaker by expanding income eligibility, increasing the credit amount, and indexing the credit and eligibility to keep pace with inflation.

Circuit Breaker Basics

A “circuit breaker” tax credit provides property tax relief to low-income households that spend a high proportion of income on property taxes. Like an electrical circuit breaker, it kicks in when a property tax bill goes over a certain percentage of a taxpayer’s income. As of 2019:

  • 31 states (including Missouri) provided some type of a circuit breaker tax credit.
  • 22 states extend the credit to renters, recognizing that property owners pass on the cost of property taxes to tenants through rent increases.

Missouri’s version of the “circuit breaker,” known as the Missouri Property Tax Credit, is available to both homeowners and renters and is based on the amount of property tax or rent paid and household income.

  • The maximum credit is $750 for renters and $1,100 for owners. The actual credit is based on the amount of property tax or rent paid and total household income.
  • While Missouri’s Circuit Breaker is a lifeline for many older adults and people living with disabilities, only very low-income recipients (those with incomes below $14,300) qualify for the maximum credit.
  • In 2021 the average credit was just $602.

Income Limits
Renters: Single ≤ $27,500, Married ≤ $29,500
Homeowners: Single ≤ $30,000, Married ≤$34,000

Eligibility
Must be 65 years of age or older, a person 18-64 who is 100% disabled, or 60+ and receiving surviving spouse social security benefits.

Those renting from a facility that does not pay property taxes (such as a non-profit assisted living facility) are not eligible.


Shortcomings of the Credit

Current statutory constraints limit the reach and impact of the circuit breaker.

  • Although property taxes increase annually, the size of Missouri’s circuit breaker credit is flat and is not tied to any annual increase.
  • The size of the tax credit phases out quickly so that those near the income eligibility cap receive credits of less than $10 annually.
  • While average incomes increase over time, Missouri’s income eligibility guidelines are not adjusted for inflation. As a result, fewer people qualify for the credit over time and those that do tend to fall higher on the phase-out scale – meaning they qualify to receive a smaller credit.

Strengthening the Circuit Breaker Property Tax Credit

Missouri’s circuit breaker was originally approved in 1973 and has not been adjusted since 2008.

  • As a result, income guidelines and credit amounts have fallen behind even inflationary increases.
  • Recent trends in housing costs and associated property tax increases are making it even harder for older adults and Missourians with disabilities to remain independent in their own homes.

To meet this need, Missouri lawmakers could strengthen the circuit breaker by expanding income eligibility, increasing the credit amount and indexing the credit and eligibility to keep pace with inflation.

Specifically, the following changes would modernize the circuit breaker and account for inflation since 2008:

Increase the Maximum Income Limit

  • Single renters from current cap of $27,500 to $38,200, and married renters from $29,500 to $41,000
  • Single owners from current cap of $30,000 to $42,200, and married owners current cap of $34,000 to $48,000

Increase the Maximum Credit

  • To $1,055 for renters (from current limit of $750)
  • To $1,550 for owners (from the current limit of $1,100)

Modify the phaseout increment to ensure recipients are reimbursed for a larger portion of their property taxes

Index both the income limits and the maximum credit to inflation to ensure that the circuit breaker keeps pace with the rising cost of property over time.


Proposed Circuit Breaker Improvements Would Benefit 142,000 Households

Income GroupLowest 20%Second 20%Middle 20%
Income RangeLess than $22,000$22,000 – $40,000$40,000 – $66,000
Average Income$13,000$30,000$52,000
Average Increase in Circuit Breaker Tax Credit for Recipients$186$336$320

Circuit Breaker Property Tax Credit Reaches Missourians in Every County

Tax Year 2021 Claims by County

CountyTotal ClaimsTotal BenefitsAverage Benefit
Adair610$331,160$543
Andrew251$134,605$536
Atchison141$82,073$582
Audrain548$294,875$538
Barry896$501,387$560
Barton365$196,169$537
Bates310$153,871$496
Benton684$357,353$522
Bollinger337$173,060$514
Boone2,422$1,461,572$603
Buchanan2,246$1,239,563$552
Butler1,514$858,362$567
Caldwell171$96,908$567
Callaway684$402,123$588
Camden721$411,110$570
Cape Girardeau1,869$1,086,600$581
Carroll222$113,198$510
Carter177$87,177$493
Cass1,507$933,542$619
Cedar366$192,132$525
Chariton159$79,193$498
Christian1,585$998,631$630
Clark121$57,542$476
Clay3,285$2,074,195$631
Clinton340$204,483$601
Cole1,111$661,450$595
Cooper486$275,923$568
Crawford780$428,454$549
Dade190$95,732$504
Dallas452$236,051$522
Daviess173$89,504$517
Dekalb178$89,234$501
Dent447$220,326$493
Douglas372$171,353$461
Dunklin1,214$691,220$569
Franklin2,341$1,421,881$607
Gasconade355$192,937$543
Gentry197$110,320$560
Greene7,134$4,445,244$623
Grundy330$167,960$509
Harrison242$128,862$532
Henry748$403,278$539
Hickory247$113,013$458
Holt91$49,254$541
Howard227$132,995$586
Howell1,213$619,652$511
Iron358$198,735$555
Jackson13,960$8,825,137$632
Jasper2,935$1,615,123$550
Jefferson4,736$3,012,679$636
Johnson723$433,503$600
Knox105$48,584$463
Laclede1,055$549,473$521
Lafayette591$359,679$609
Lawrence959$527,894$550
Lewis90$44,432$494
Lincoln819$466,708$570
Linn290$149,419$515
Livingston421$225,699$536
Macon329$164,328$499
Madison510$289,650$568
Maries187$96,912$518
Marion754$412,775$547
Mcdonald270$139,931$518
Mercer90$45,424$505
Miller658$350,968$533
Mississippi424$217,661$513
Moniteau262$144,649$552
Monroe156$76,260$489
Montgomery252$143,584$570
Morgan511$260,207$509
New Madrid575$308,322$536
Newton1,156$636,687$551
Nodaway394$213,405$542
Oregon301$125,207$416
Osage167$92,862$556
Ozark259$122,339$472
Pemiscot753$445,304$591
Perry486$281,035$578
Pettis1,196$678,560$567
Phelps982$554,179$564
Pike349$190,522$546
Platte818$522,577$639
Polk808$444,301$550
Pulaski621$347,701$560
Putnam140$69,382$496
Ralls191$100,632$527
Randolph595$334,267$562
Ray367$206,901$564
Reynolds142$65,707$463
Ripley290$147,316$508
Saline529$293,144$554
Schuyler59$28,959$491
Scotland87$41,299$475
Scott1,273$731,584$575
Shannon208$85,154$409
Shelby132$61,250$464
St. Charles4,034$2,483,280$616
St. Clair236$116,547$494
St. Francois2,508$1,477,725$589
St. Louis City13,237$8,453,223$639
St. Louis County18,768$12,980,140$692
Ste. Genevieve352$192,257$546
Stoddard998$556,739$558
Stone610$324,407$532
Sullivan136$68,277$502
Taney1,351$748,766$554
Texas493$242,987$493
Vernon608$325,982$536
Warren542$312,591$577
Washington547$269,525$493
Wayne369$176,244$478
Webster783$437,802$559
Worth30$13,270$442
Wright576$255,420$443

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