Rapid City, SD – Seniors in South Dakota, including residents of Sioux Falls, Rapid City, and Pierre, can now take advantage of federal extra standard deductions beginning in 2025. These deductions aim to reduce taxable income, helping older adults retain more of their retirement funds for healthcare, utilities, and day-to-day expenses.
According to Kiplinger, the deductions are structured as follows:
- Single or Head of Household: Extra $2,000 if 65 or older; $4,000 if 65 or older and blind.
- Married Filing Jointly: Extra $1,600 per qualifying spouse if 65 or older; $3,200 if both spouses are 65 or older and blind.
Additionally, the One Big Beautiful Bill introduces a new senior deduction of $6,000 for individuals and $12,000 for couples, effective from 2025 through 2028. Higher-income seniors will see the deduction gradually phase out at a 6% rate for singles earning more than $75,000 and married couples earning more than $150,000.
This federal deduction provides flexibility for seniors supplementing income with part-time work, pensions, or Social Security benefits, offering a meaningful reduction in federal tax liability.
South Dakota Property Tax Relief Programs for Seniors
In addition to federal deductions, the State of South Dakota offers several property tax relief programs specifically designed for seniors. Here are the details –
Assessment Freeze Program
The Assessment Freeze Program allows homeowners aged 65 or older to freeze the assessed value of their property, preventing annual increases in property taxes. This program is especially helpful in cities like Sioux Falls and Rapid City, where property values are steadily rising.
Seniors must apply annually and meet all eligibility requirements to maintain these benefits, ensuring predictable property tax expenses and better budget planning.
Sales and Property Tax Refund Programs
South Dakota also offers refund programs for seniors who meet income and residency requirements, helping offset the financial impact of property and sales taxes:
- Single seniors: Annual income of $16,566 or less
- Households: Combined income of $22,484 or less
These programs are particularly valuable for seniors living on fixed incomes, supporting financial independence and stability, even in rural areas where property taxes may vary.
Eligibility Criteria for Senior Tax Benefits
To qualify for federal and state senior deductions, applicants must meet these criteria:
- Age: At least 65 years old on or before January 1, 2025, or disabled as defined by the Social Security Act
- Residency: South Dakota resident for the entire previous year
- Income: Within state-specified limits for property tax relief or refunds
- Property Ownership: Must own the home or retain a life estate in the property
Understanding eligibility requirements ensures seniors can maximize their access to both federal and state-level benefits, enhancing overall financial security.
Application Deadlines and Tips
Applications for property tax relief programs in South Dakota are available online or at county treasurer’s offices starting in January, with a submission deadline of April 1 each year. Timely applications are crucial to avoid missing out on valuable benefits.
Many seniors seek assistance from family members or financial advisors to track deadlines and ensure accurate submission.
Final Thoughts
Seniors in South Dakota now have multiple ways to reduce their tax burden and improve financial stability. By combining federal extra standard deductions with state-level property tax relief programs, retirees can better manage expenses, maintain homeownership, and enjoy a more comfortable and secure retirement.
Are you a senior in South Dakota planning to use these tax benefits? How will they impact your retirement planning? Share your thoughts in the comments below.
