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Volume 12 - Opinions of Counsel SBRPS No. 25

Opinions of Counsel index

Senior citizens exemption (income requirement) (unreimbursed costs for home health aide or visiting nurse) - Real Property Tax Law § 467:

Where a municipality has adopted the option in section 467 of the Real Property Tax Law to permit an applicant to deduct unreimbursed medical and prescription drug costs from his or her income, costs for home health care and visiting nurses are deductible.

The provisions of section 467(3)(d) providing that nursing home costs of an exemption applicant are deductible from the applicant’s income are applicable regardless of whether a municipality authorizing the exemption has adopted the unreimbursed medical and prescription drug provision.

We have received an inquiry concerning the income requirement of the senior citizens exemption (Real Property Tax Law, § 467(3)(a)). The assessor notes that nursing home costs may be deducted from income and asks if the salary of a home health care aide or a visiting nurse may also be deducted.

Section 467(3)(a) defines what is and is not considered “income” for purposes of the exemption. It also provides, in part: “any such income shall be offset by all medical and prescription drug expenses actually paid which were not reimbursed or paid for by insurance, if the governing board of a municipality, after a public hearing, adopts a local law, ordinance or resolution providing therefor” (added L.1996, c.313). Here, one or more of the municipalities which uses the assessor’s town’s assessment roll for tax levy purposes has adopted this option.

We construed this provision of law in 10 Op.Counsel SBRPS No. 28 in which we opined: “unless and until the Legislature decides to revisit its chapter 313 amendment or the courts have had the opportunity to construe the new medical/drug income offset provision, we recommend that assessors apply a plain language reading to the new law. To the extent they are of assistance, we believe that the Internal Revenue Code, its regulations, and interpretations thereof, may be useful tools.” {1}  In this regard, we note that, in listing expenses which may be included in figuring a medical expense income tax deduction, Internal Revenue Service Publication 502 “Medical and Dental Expenses” (for use in preparing 2008 returns”) states at page 12:

Nursing Services

You can include in medical expenses wages and other amounts you pay for nursing services. The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. This includes services connected with caring for the patient’s condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. These services can be provided in your home or another care facility.

Accordingly, in our opinion, where the unreimbursed medical and prescription drug provision is in effect, costs for home health care and visiting nurses should be deducted from an applicant’s income in determining section 467 income eligibility.

As to the nursing home provision, we note that it is not dependent on adoption of the medical/prescription drug provision. Rather, section 467(3)(d), which is the statute’s legal residence requirement, excuses the absence from the residence of an owner who is “receiving health-related care as an inpatient of a residential health care facility” (e.g., nursing home). That provision continues: “any income accruing to that person shall only be income only to the extent that it exceeds the amount paid by such owner, spouse, or co-owner for care in the facility. . . .” Consequently, this provision is applicable to all municipalities which authorize the senior citizens exemption regardless of their choice whether to adopt the medical/prescription drug provision.

March 30, 2009

{1}  Treasury Reg., § 1.213-1(e)(1)(ii), as cited in what is now 47A CJS, Internal Revenue, § 201 (2008 ed.) [10 Op.Counsel SBRPS No. 28 quoted an earlier edition], states that nursing services are included as deductible medical expenses for income tax purposes.