Connecticut Municipalities and Taxing Districts Offering Tax Relief Programs to Residents Affected by Covid-19
By David Dobin and Jenna Cutler
Municipalities across Connecticut have adopted tax relief programs in recent weeks as ordered by Connecticut Governor Ned Lamont in early April to alleviate the economic impact of the Covid-19 pandemic. Executive Order 7S required each municipality to provide tax relief in the form of a ninety-day tax deferral, a low-interest program, or both - and make its election by April 25, 2020. Executive Order 7W extended the order to quasi-municipal corporations, including special taxing districts. Those located in multiple cities or towns were required to elect one of those programs (or both).
The Office of Policy and Management’s (OPM) Intergovernmental Policy and Planning Division currently provides detailed guidance on municipal tax deferral and low-interest programs, including answers to frequently asked questions, application forms, explanations as to how they work and who is eligible, and a list of which programs are being offered in each municipality. Click here for a copy of the list as of April 28, 2020.
Under the deferral program, eligible taxpayers may defer payment for ninety days (without interest) on taxes and assessments becoming due between April 1, 2020 and July 1, 2020. Municipalities, however, had the option to make the tax deferral available to all taxpayers or instead make it available to only those who can “attest to” or “document” a loss of income as a result of the Covid-19 pandemic. The OPM’s list identifies those municipalities providing relief without eligibility requirements under the column “MUNICIPAL OPTION.”
Under the low interest rate program, which does not contain eligibility requirements (except for landlords), interest rates on amounts due for the period of April 1, 2020 through July 1, 2020 are reduced to 0.25% per month, or 3% per year. According to the Office of Policy and Management’s explanation, the program applies to amounts becoming due before July 1, 2020 and delinquent amounts – but only if the entire delinquency is paid by July 1, 2020.
Under both programs, special rules apply to landlords. In order to benefit from the tax deferral program, landlords are required to provide documentation that the property has, or will, suffer a significant income decline, or that forbearance was also offered to the tenants or lessees. In order to be eligible to participate in the lower interest rate program, landlord must offer “commensurate forbearance” to tenants.
Each municipality has adopted its own tax relief programs, including rules on who is eligible and how to apply. As a result, it is important to check OPM’s guidance and reach out to your local town officials for details, including eligibility requirements and deadlines to apply.
While some towns have posted information about their tax relief programs on their web sites, others have not. To see if your town has posted information about its tax relief programs, click on one of the municipalities listed below to visit its website (last updated April 29, 2020):
Other Covid-19 Client Alerts are available on our firm’s website at www.cohenandwolf.com
With additional clarifications and information emerging on a nearly daily basis, it can be difficult to keep track of the many moving pieces that are in play. Please feel free to contact us with any questions.