Keep an eye out on your mailbox
You may be getting a letter from the state saying you owe them money…even if you’ve already paid your income taxes for the year.
The commissioner of Revenue Services, Kevin Sullivan, gave a public apology for an agency error that resulted in about 120,000 taxpayers to overstate the value of a property tax credit. This error resulted in $12 million in underpayments.
The error is related to the new income ceilings the legislature passed last year for the property tax credit, which is a maximum of $300 for the 2015 tax year. Apparently the DRS failed to notify CPAs and tax preparation software companies of eligibility changes the legislature made to the credit.
This will affect taxpayers who file jointly or separately as heads of households. It does not affect single filers or those who didn’t claim the property tax credit.
Affected taxpayers who’ve received refunds or already filed their taxes will be billed, without penalty. You can either send the money owed in immediately, or you can wait until next year and pay it with your 2016 return. You can either send back the money they owe now or wait until next year and pay it with their 2016 tax return with no penalty.