Tax Deferment

• Also called the Circuit Breaker Program.
• Applicants must be 65 years of age or totally and permanently disabled as of January 1.
• Gross income for 2022 for both an applicant and spouse cannot exceed $50,700.
• For unmarried joint property owners, each owner must apply and qualify separately.
• In addition, all owners must have owned and occupied the residence for the previous five years.
• Homeowners must apply every year for this program.
   

Under this program, taxes for each year are limited to a percentage of the owner’s income. Taxes above the limitation amount are deferred, which means delayed until a future date. The last three years of deferred taxes become payable with interest if a disqualifying event occurs. Disqualifying events include death of the owner or transfer of the property where the owner’s share is not passed to another qualifying owner, and failure to use the property as the owner’s permanent residence.

For an owner whose 2022 income does not exceed $33,800, the owner’s taxes will be limited to 4% of their income. For an owner whose 2022 income exceeds $33,800 but does not exceed $50,700, the owner’s taxes will be limited to 5% of their income. Participation in this program requires all owners to apply and qualify. 

You must file an application for the Circuit Breaker Tax Deferment Program each year!

Required Documents for Application

• Applicants must provide a copy of the first two pages of your individual Federal Tax Return for the preceding calendar year. If you do not file a Federal Income Tax Return, you must attach documentation to verify income (W-2, SSA-1099, 1099-R, 1099-INT, 1099-DIV, financial institution statements, etc.) Married applicants filing separate returns should submit both returns.
• Those qualifying as totally and permanently disabled must submit a Disability Certification with their application.

To apply, complete and submit FORM AV9 and required income statements with the tax office by June 1. For disabled applicants, you must also complete FORM AV-9A signed by a physician licensed to practice medicine in North Carolina.

Can I still apply after June 1? Late applications may be considered through the end of 2023 for reasons such as a physical or mental illness, hospitalization, death of taxpayer or immediate family member, or military deployment. Please submit a letter with your application to explain the lateness and verify the cause. Each request will be considered on a case-by-case basis.