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23 July 2017

Omer FriedaI was very fortunate to have grandparents until I was 50. My grandparents were hard-working, stayed healthy, and lived long lives. By the end, however, my grandfather’s legs were not working very well and he was falling frequently. He had lived in his house for more than 60 years. The family knew he was most comfortable there and would have preferred to spend his final months there. We tried, probably for too long, to make staying in his home work. In the end the halls and doors were just too narrow to accommodate walkers or wheelchairs. The tub and shower were not safe enough. No one could bear picking him up again. We were forced to move him into a nursing home.

This is the kind of heartbreak millions of families are currently dealing with. Not only can it be heartbreaking, it can be wallet-breaking as well. Those nursing homes aren’t cheap. It cost more than twice as much for my grandfather’s nursing home care than it cost to bring someone in every day to help care for him in his own home. It was literally costing more for him to be in a place he liked less. It’s the kind of thing that makes you shake your head in disbelief.

A solution may have been to make his home safer and more accommodating for him to stay in. If his doors could have been widened for wheelchair access, and his bathroom remodeled with a safer tub and some grab bars, perhaps he could have stayed in his own home until the end. He was on a tight budget, though, so coming up with the money to make those home improvements would have been a challenge.

Residents of Virginia have access to a program my grandfather in Ohio didn’t have. A tax credit that can help make houses more livable for seasoned citizens. The Commonwealth has implemented the Livable Homes Tax Credit. This tax credit is designed to improve the accessibility and “universal visitability” in Virginia’s residential units. The credit is for up to $5,000 and can be used to either purchase a new place to live or to pay 50% of the cost (up to $5,000) to retrofit your current residence.

You Can’t Just Claim the Credit. Pre-Approval is Required.

Virginia’s legislature got a little fancy with this program, so don’t just retrofit your home and then try to claim the credit when you file your Virginia income tax return. You must be pre-approved by Virginia’s Department of Housing and Community Development. Essentially, the Department of Housing and Community Development has been given authority to grant this tax credit, so unless your retrofitting project meets with their approval, you won’t be able to claim the credit from the Department of Taxation.

It’s a government program involving tax credits, so the rules are complex. I’m going to hit the highlights on how to get approval, but if you’re interested in pursuing this I encourage you to do your own research into the nuances of the program.

For your retrofit of an existing residence to qualify you must have installed at least one of the following:
• Accessible route to a zero-step entrance to a residence (i.e. a wheelchair ramp)
• Zero-step entrance to the residence
• 32-inch-wide doorways
• 36-inch wide hallways
• Accessible light switches, electrical outlets, or climate controls
• Accessible bathroom
• Accessible kitchen
• Lift/elevator
• Sensory modification (i.e. timer on stove with flashing light for hearing impaired)

Additionally, your modifications must meet existing government standards for utility of the accessibility feature. (Think ‘Americans with Disabilities Act’ compliant)

You complete the application available on the Department of Housing and Community Development website. You must include copies of purchase contracts, invoices, cancelled checks, construction contracts, and proof that the person applying for the tax credit actually paid for the retrofitting work. You send all your documentation to the Department of Housing and Community Development not later than 28 February of the year after the construction/retrofitting was completed. You will be notified by 01 April if your Livable Homes Tax Credit is approved. If it is, you can file for the credit on your Virginia income tax return.

If your Livable Homes Tax Credit is larger than your tax owed to Virginia you can carry over any unused portion of the credit for up to seven years.

I don’t want to get too schmaltzy, but I hope as many Virginians as possible take advantage of this tax credit. My Grandfather was from The Greatest Generation of Americans. When his country called, he kissed his pregnant bride goodbye and sailed across the Atlantic Ocean to liberate Europe with Patton’s Third Army. He came home in 1946 and introduced himself to the daughter he had not yet met – my mother. He raised his family, worked hard, went to church, paid his taxes, and was as extraordinary as all the other parents and grandparents out there. All of whom deserve to leave this world in the quiet comfort of their own homes if that is what they want. Hopefully this Virginia tax credit will make it possible for a few more of them to live out their days as they choose. If you have any questions about how to apply for this tax credit, please contact me.

 

 

Disclaimer

Information in the Tax Blog is current as of the day it was posted. Tax laws change frequently, and it is likely that as time passes acts of Government will make some of the older blog content out of date.

The information provided is for education purposes only. It is general in nature and may not pertain to the Reader's situation. Every taxpayer's circumstances are unique. Reader's are urged to do some research or talk to a tax professional before acting on any of the information posted in this blog.

Paul D. Allen is a proud member of the National Association of Enrolled Agents, the National Association of Tax Professionals the Financial Planning Association of Hampton Roads, the National Association of Personal Financial Advisors (NAPFA), and The Tidewater Real Estate Investors Group. You can read more about Paul's background here.

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Common Acronyms

ACTC - Additional Child Tax Credit

AGI - Adjusted Gross Income

AMT - Alternative Minimum Tax

APTC - Advanced Premium Tax Credit

AOC - American Opportunity Credit

CTC- Child Tax Credit

EIC - Earned Income Credit

HoH - Head of Household

LLC - Lifetime Learning Credit

MFJ - Married Filing Jointly

MFS - Married Filing Separately

MAGI - Modified Adjusted Gross Income

PIM - Plan of Intended Movement

PTC - Premium Tax Credit

QC - Qualifying Child

QHEE - Qualifying Higher Education Expenses

QR - Qualifying Relative

QW - Qualifying Widow(er)

 

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