At its most recent session, the Wyoming State Legislature passed House Bill 0099 which increases eligibility for a property tax refund program for Wyoming residents. During a time of steep rises in home values, and subsequent soaring property taxes, this is a welcome law. Signed into law by Governor Gordon on March 2nd, the program is now official.

This law impacts many Wyoming taxpayers, so I felt a quick rundown of how the program works would be helpful.

What is the Property Tax Refund Program?

Simply put, this program allows Wyoming homeowners to apply for a property tax refund based on their 2022 property tax assessment as long as they meet certain eligibility requirements. This was one of the Wyoming Legislature’s ways to address the sharp, unexpected rise in property taxes owed by homeowners.

How does the property tax refund program work?

Any Wyoming resident who owns a home can apply to the program, as long as they meet certain qualifications. Based on the Property Tax Refund Brochure on the Wyoming Department of Revenue’s website, these qualifications are:

You own a home
You have paid your 2022 property taxes in a timely manner
You have been a Wyoming resident for the past five years
You occupied the residence for not less than nine months of the tax year

In addition to these requirements, there is an “asset test” and an “income test.” To be eligible, total assets per adult household member cannot exceed $150,000. The application defines these assets as bank accounts, investments (stocks, bonds, mutual funds, CDs, etc), real estate other than the home subject to the application, and motor vehicles in excess of one allowed for each adult household member.

The application doesn’t mention this, but the brochure clearly states that “any retirement accounts (IRAs, 401K plans, cash value of life insurance policies, Medical Savings, etc.)” can be excluded from your total assets list. “Medical Savings” is likely referring to HSAs and FSAs.

If your 2022 property tax bill exceeds 10% of your reported income on the application, then the asset test does not apply.

To pass the income test, applicants’ total income for 2022 must be equal to or less than 125% of the median household income for the county in which they reside. For Lincoln County (where most Hale Financial clients reside) this is $95,163.

If you cannot pass either of these tests, then you are not eligible to participate in the program.

How much of a refund can I receive?

The law states that a refund granted cannot exceed 75% of the applicant’s prior year’s property tax, “but in no instance shall the amount of refund exceed one‑half (1/2) of the median residential property tax liability for the applicant's county of residence as determined annually by the department of revenue;”

This appears to mean that the Department of Revenue will compare what you paid in property taxes last year and compare it to the median tax paid in your county. Here’s an example to illustrate how I think this will work.

Example

Dave and Gloria are residents and homeowners in Lincoln County. They meet all eligibility requirements of the property tax refund program. In 2022 they paid property taxes of $3,000 on their home. Based on this initial assessment, they would be eligible for up to a 75% refund on their taxes, or $2,250. However, if the average property tax for Lincoln County residents is $2,000 then Dave and Gloria will only be eligible for up to 50% of this average, or $1,000.

How do I apply?

The application period opens April 1, 2023 and continues until June 5, 2023. Paper applications are available through the Department of Revenue’s website, linked here, or you can apply online at the same link. The brochure cautions that refund amounts may be adjusted based on funding available, so it’s worth getting an application in sooner than later.

A few documents need to be attached to the application including a property tax bill and property tax payment receipts for 2022.

In Summary

This program is a great way to apply for a partial refund of property taxes paid last year. The barrier of eligibility is fairly low, especially since retirement accounts are excluded from the asset test. As a result, many Wyoming residents should be eligible. The application is fairly straightforward. I can’t imagine the entire application process taking more than an hour or so, in which case even a $500 refund is well worth the effort.

There are some unknown answers remaining, such as the start date for determining whether you meet the five year required residency test, and why 401k contributions for 2022 appear to count toward determining your income number (which lowers your total income), but IRA contributions do not appear to count.

Still, the program is a good way to help reduce the property tax burden Wyoming families faced last year.