7-Sep-21 – Tax-weary Chicago homeowners – especially seniors – are strongly advised to put on their bifocals and carefully read the 2020 second-installment tax bill that recently arrived in their mailbox.

Apparently, in an effort to pump up tax revenues, Fritz Kaegi, the new, reform-minded Assessor of Cook County, is cracking down on legal tax breaks called exemptions.

Under law, every property owner who resides in his or her home is entitled to a Homestead Exemption. Owners over 65 years of age are entitled to a Senior Exemption. If a senior’s annual income is less than $65,000, he or she also may qualify for a Senior Freeze.

Reportedly, the Assessor’s computer specialists have mysteriously removed tens of thousands of Chicago Homeowner and Senior Exemptions, and the Senior Freeze. The Senior Freeze is especially cherished by elderly retirees surviving on a fixed income because they know that their tax bill will not go up every year.

Last week’s Home Front preview of this column said: Two Chicago homeowners’ tax exemptions mysteriously disappear and their bills skyrocket.

On August 24, a day after the first article of this two-part series was published online, the Assessor issued a two-page press release asking: “Homeowners: Are you missing exemptions on your property tax bill?”

The press release said: “If a homeowner believes they are entitled to an exemption that is not reflected on their tax bill, they can apply for what is called a Certificate of Error. The Certificate of Error process provides homeowners an opportunity to obtain missing exemptions for up to three prior years, in addition to the current tax year. Homeowners can now apply for the 2020, 2019, 2018, and 2017 tax years.”

The Assessor’s press release was accompanied by an elaborate graphic of a typical 2020 tax bill showcasing a “Tax Calculator” and a breakdown of how the three exemptions reduced the sample tax bill by $1,598 – from $2,372 to $774.

Certificate of Error applications with copies of supporting documentation can be filed online, by mail, or in person. Visit www.cookcountyassessor.com/exemptions.

On the Assessor’s website, click on the Exemptions menu option at upper right and select Certificates of Error, then follow the instructions.

For the standard Homeowner Exemption and the Senior Exemption, property owners will be asked to upload a scanned copy of their driver’s license, and DocuSign an Occupancy Affidavit.

Warning: For the Senior Freeze, you may need help from your accountant to verify net income and other financial numbers from your 2019 federal income tax return. In addition to verifying that your net income is under $65,000, there also will be an Occupancy Affidavit to sign.

“Homeowners are strongly encouraged to apply online, as representatives of the Assessor’s Office can easily provide updates on the status of applications,” the Assessor’s press release said.

This year, many exemptions were “auto-renewed” to make the process more convenient for homeowners, said the Assessor. Apparently, in many cases exemptions were mysteriously “auto-removed,” causing a spike in taxes and an uprising by many irate taxpayers.

So, always remember to double-check your property’s exemptions, especially if your taxes are escrowed and paid by your mortgage lender.

Here are two examples of how missing exemptions impacted the final tax bills:

• North Park. The owner of a two-story frame home near Legion Park received a 2020 bill of $11,833, up a whopping 33 percent from the $8,890 paid in 2019 when three exemptions were in place. Close analysis showed the $2,943 tax increase was directly due to “lost” Homeowner and Senior Exemptions, plus a deletion of the homeowner’s qualified Senior Freeze.

(Right) Gateway Plaza Fountain in Legion Park. Photo provided by Chicago Park District.

• Irving Park. The owner of a stucco bungalow in the Villa Historic District received a 2020 bill of $10,145, up a hefty 7.3 percent from $9,447 in 2019. Analysis showed the increase was directly due to “lost” Homeowner and Senior Exemptions.

The Homeowner’s exemption recently was increased to $10,000 from $7,000, and the Senior Exemption was hiked to $8,000 from $5,000. Those amounts are deducted from the equalized assessed value of a home to which tax rates are applied in order to determine the individual tax bill.

Also, more seniors can qualify for the Senior Freeze because the Illinois Legislature recently increased the maximum annual income to receive the freeze to less than $65,000 from less than $55,000.

“The property tax bill is determined by four factors – the assessment, the equalization factor or ‘multiplier,’ the tax rate, and the exemptions,” said Michael Griffin (left), a Chicago real estate tax appeal attorney.

However, predicting a hefty property tax increase when the 2021 bill arrives in 2022 really centers on two wild cards – the tax rate and the state equalization factor, which can’t be challenged by taxpayers.

The equalization factor, or multiplier, is established each year for Cook County to bring property tax assessments in line with other parts of Illinois. The factor is determined by the Illinois Department of Revenue.

The main engine that drives up property tax bills is the amount of money spent by local government. For example, homeowners who read their 2020 tax bills will see the continued increased spending for schools and police, firefighter, and teacher pensions.

Property owners who think they are over-assessed should appeal now, Griffin advises.

Contact the Assessor’s Office to find comparable properties or start the appeal process. The Assessor is now working through the appeals process for 2020. For 2020, all of Chicago is being reassessed.

A taxpayer can file with the Cook County Board of Review and later with the Illinois Property Tax Appeals Board. Or call Michael Griffin, an expert tax assessment lawyer.