first quarter 2018 equalqual j justicusticee …...what are payday loans? payday loans are...

By Molly McDonnell

“TO AVOID HAVING A CRIMINAL CASE FILED AGAINST YOU, YOU MUST CONTACT THIS OFFICE IMMEDIATELY AND PAY OFF YOUR BAD CHECKS.”

If you have borrowed money from a payday lender or rented from a rent-to-own compa-ny, not been able to pay, and then received

an official-looking letter threatening criminal action against you, chances are you are not alone.

Can lenders really use the criminal justice system to collect debts? The answer is almost always no, but there are a few narrow exceptions to that rule. To understand your rights when faced with threats of criminal action, you first must figure out what type of legal agreement you and the lender signed. Lately, consumers have received threats of criminal action from failing to pay outstanding debts in two situations: payday loans and rent-to-own.

What are payday loans?Payday loans are short-term, high-interest loans. Lenders market payday loans to people who need to borrow small amounts of money quickly. These loans are called payday loans because borrowers are expected to pay back these loans in two weeks, or on payday.

Payday loans have extremely high-interest rates, sometimes as high as 400%. In comparison, credit cards usually charge between 10% and 30%. Unfortunately, it is common for people to get trapped in a cycle where they repay the loan many times over in interest.

In Iowa, the Division of Banking licenses payday lenders. Loans cannot exceed $500.

How do payday loans work?Payday lenders will issue cash in exchange for the borrower signing a post-dated check. The check is for the amount borrowed, plus

a finance charge and postdate. The lender generally postdates the check by two weeks. In two weeks’ time, the person is expected to have paid back the borrowed amount plus finance charges. Online lenders will instead request access to your checking account to deposit the borrowed money, and then withdraw it plus the finance charges.

Can payday lenders and debt collectors file criminal charges against me if I don’t repay the loan?The answer to this question is unfortunately unclear. The law in Iowa about whether bouncing a post-dated check is a crime is complicated. Although it is generally illegal for creditors or third-party collection agencies to threaten debtors with criminal prosecution for failure to make good on a postdated check, it is best to talk to an attorney as soon as possible.

Payday lenders and debt collectors can and often do file civil lawsuits against borrowers who do not pay back their loans for breach of contract. You may also have rights to sue or countersue based on violations of the law.

What are rent-to-own contracts?Also known as lease-to-own or a lease-option contract, rent-to-own contracts allow consumers to rent a good (examples include a television or a couch) for a set amount of time before the lender gives the consumer an option to purchase the item. The lender may offer the consumer the option to purchase when the lease expires or before. Rent-to-own contracts are best suited for people who do not qualify for loans, have bad credit, or those who do not want to commit to buying an item. Consumers can move into a rent-to-own house or take home a rent-to-own good immediately. However, there are usually specific terms and conditions that vary based on the type of rent-to-own contract.

How do rent-to-own contracts work?A rent-to-own contract contains two parts. The first part is a lease agreement that covers a period during which a consumer pays a lender a regular fixed payment. The second is a contract of sale that includes information about the option to purchase, sometimes advertised as rent to own. This information includes when that option will be available,

and what portion of the rental payments will be credited toward that price.

Can rent-to-own lenders file criminal charges against me if I don’t repay the loan?Yes, but only if you do not return the item you rented. Under Iowa law, a consumer can be charged with theft for failing to pay for and return that rental item before it has been officially purchased and without the consent of the lender. The consumer must have had the intent to take the item without paying.

The lender must formally demand the consumer to return the good or allow the consumer to pay for the good 48 hours before they can contact the police to initiate criminal proceedings. If the consumer does not either return the good or pay for the good in full, this gives the police evidence of a consumer’s intent to deprive the lender of the good, which is theft. A consumer has a defense to prosecution of the theft charge if they pay fair market value (which may or may not be the actual value advertised) of the good plus any rental charges due (not to exceed 120 days) and any value of damage to the good within 48 hours of the arrest.

I think I may be in danger of defaulting on my payday loan or rent-to-own contract. What do I do?The earlier that you understand your rights, the better. You may want to contact an attorney as soon as possible.

• Iowa Legal Aid provides help to low-income Iowans.

• To apply for help from Iowa Legal Aid:• apply online at IowaLegalAid.org

OR• call 800-532-1275• Iowans age 60 and over,

call 800-992-8161

• If Iowa Legal Aid cannot help, you can look for an attorney on “Find A Lawyer” on the Iowa State Bar Association website at IowaBar.org. A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.

Molly McDonnell is a staff attorney in Iowa Legal Aid’s HELP Regional Office in Davenport.

Can They Real for Not Paying

Equal JusticE JournalEqual JusticE JournalFIRST QUARTER 2018 VOLUME 39 ◆ NUMBER 1

Visit us on the Web at IowaLegalAid.org

FREE Legal Help

The Legal Hotline for Older Iowans

(60 & Over)An Iowa Legal Aid Project

800-992-8161 (282-8161 in Des Moines)

ly Arrest Me My Debt?

2 ◆ The Equal Justice Journal First Quarter 2018

The Equal Justice Journal is published four times a year by Iowa Legal Aid. The Equal Justice Journal is free to low-in-come people in all counties of Iowa. All others must pay a $10 annual subscription fee. The EJJ is available in a larger-print edition upon request.

All correspondence should be sent to:The Equal Justice JournalIowa Legal Aid1111 9th Street, Suite 230Des Moines, IA 50314-2527© 2018 Iowa Legal AidNote: Photographs in this newsletter are produced inde-pendently of text and bear no relationship to cases or incidents discussed herein (except where noted below a picture).

The information in this newsletter was correct as of the date it was printed. The laws may have changed. DO NOT ASSUME THAT THE INFORMATION IS CORRECT AFTER THE DATE OF PUBLICATION.

You should see a lawyer to get complete, correct, and up-to-date legal advice. Do not rely on the general information in this newsletter for your specific case. If you need a lawyer but can’t afford one, contact Iowa Legal Aid. You may be able to get free legal help. Call or write Iowa Legal Aid, or apply on line at IowaLegalAid.org.

AS YOU READ THIS NEWSLETTER, REMEMBER IT IS NOT A SUBSTITUTE FOR LEGAL ADVICE.

PUBLIC NOTICEMeetings of the Iowa Legal Aid Board of Directors are open to the public. The Board of Directors meets at least four times each year. The public is encouraged to attend. The next meeting of the Board of Directors is scheduled to take place on Saturday, May 5, in Des Moines. For details on the next meeting of the Board, call toll-free: 800-532-1275, and ask for Arlys.

Free Help with Tax Questions and Problems ■ Find out about tax credits like the Earned Income Credit■ Get Help with Problems with the IRS

Call Iowa Legal Aid for details about the Low-Income Taxpayer Clinic (LITC).

800-532-1275Or visit Iowa Legal Aid’s website: IowaLegalAid.org

The LITC does not provide tax preparation.

Staff Recognition for Milestone AnniversariesOne of Iowa Legal Aid’s long-standing traditions has been to recognize employees

who reach milestone anniversaries. This recognition takes place at the annual Work Group Days when staff members from around the state travel to Des Moines for train-

ing. On November 30, Iowa Legal Aid recognized five staff members who have worked at Iowa Legal Aid from 10 to 40 years.

Iowa Legal Aid Hires New Executive DirectorNick Smithberg began work January

4 as Iowa Legal Aid’s new executive director. Nick most recently worked

with the New York City Department of Con-sumer Affairs as deputy general counsel, and executive director of the Paid Sick Leave and Commuter Benefits Divisions. He is a 1994 graduate of the University of Southern Califor-nia Law Center and began his law career with South Brooklyn Legal Services, working as a staff attorney in the housing unit.

Mark Zaiger, the president of Iowa Legal Aid’s Board of Directors, commented that “Nick’s vision, passion, and dedication to helping to meet the legal needs of Iowa’s poor impressed the search committee and staff members who met him. He will clearly be a zealous advocate for maintaining Iowa Legal Aid’s proven commitment to underprivileged Iowans.”

Nick replaces Dennis Groenenboom, who has served as the program’s executive director since 1992. Following his departure from Iowa Legal Aid, Groenenboom plans to consult with nonprofit organizations.

From left: Gail Klearman (25 years), Jan Rutledge (35 years), Arlys Kness (40 years), and Jessica Taylor (10 years). Not pictured: Charles Hill (10 years).

First Quarter 2018 The Equal Justice Journal ◆ 3

By Lorraine Gaynor

The Fair Labor Standards Act (FLSA) is a federal law that sets standards for minimum wage, overtime pay, and other

work-related matters. If you are a worker covered by FLSA, you have some basic pro-tections related to minimum wage and over-time. The Wage and Hour Division of the U.S. Department of Labor administers and enforces the FLSA.

A worker can also sue his employer on his own in state or federal court. In this case, a worker can ask the court for back wages owed and statutory damages. Statutory damages means additional money the employer has to pay. A court must give statutory damages unless the employer acted in good faith. These damages are equal to the back wages owed. For example, if a worker had $1,000 in unpaid wages, he could sue to recover $2,000 from his employer—$1,000 in unpaid wages and $1,000 in statutory damages.

Who is covered by FLSA?To be covered by FLSA, there must be an employer/employee relationship. FLSA does not cover independent contractors. Sometimes people are called independent contractors when they are really under the control of their employer. To figure out if someone is really an independent contractor, what matters is how much actual independence that person has. In addition to proving an employer/employee relationship, the worker also has the burden to show that his employer was involved in interstate commerce. That means that federal law may not cover some small employers, but state law may include the same employer. An attorney can ask you more questions to help determine whether FLSA covers your employer.

What are the basic protections for workers covered by FLSA?

• Covered workers must be paid the minimum wage, which is currently $7.25 per hour. If you are a farmworker who is paid on a piece-rate basis or paid by the acre, you still must make at least minimum wage for the hours you worked. Piece-rate basis means being paid by how much you pick, produce, etc.

• Covered workers must be paid overtime, which is 1½ the worker’s normal rate of pay (time and a half) for more than 40 hours per week. However, these overtime protections sometimes do not apply to farmworkers, depending on the type of work that they do. For example, farmworkers who do fieldwork are generally not entitled to overtime under FLSA. However, workers involved in packing and processing operations generally can claim overtime. The FLSA definition of agriculture is complex, so even if you think you may be exempt from overtime as an agricultural worker, it is a good idea to talk to an attorney to see if that is true.

• The minimum wage and overtime rules apply over an entire workweek. A workweek is seven consecutive days as designated by the employer.

EXAMPLE: On one day—Tuesday—during the workweek, Jacob works 5 hours, and his employer pays him $35 for that day. But for the entire workweek, Jacob worked 40 hours and was paid $290. There is likely not an FLSA

minimum wage violation in this because even though the employer paid Jacob less than minimum wage on Tuesday (on Tuesday, he was paid only $7.00/hour), his wages for the workweek equaled minimum wage.

EXAMPLE: Rose works on a piece-rate basis picking blueberries. She is supposed to make $0.52 per pound of blueberries she picks. For the last workweek, Rose worked 40 hours and picked 520 pounds of blueberries. Her employer paid her $270.40 for the workweek. Does Rose have a claim under FLSA?

• Yes. Rose was not paid minimum wage for hours she worked over the workweek. Instead, her employer paid the piece-rate -- $0.52 X 520 pounds = $270.40—which for this particular workweek ended up being LESS THAN minimum wage for her hours worked ($7.25 X 40 = $290).

• However, if Rose had made MORE THAN the minimum wage over the workweek by being paid on the piece-rate basis, she would be entitled to be paid that larger amount. For example, if Rose worked 40 hours and picked 600 pounds of blueberries over the workweek, her pay would be $312 ($0.52 X 600), which is more than $290 (40 X $7.25). Rose would be entitled to the higher amount ($312) calculated on the piece-rate basis.

What can I do if I was not paid all of my wages, not paid the minimum wage or not paid overtime?It is important to keep your own records of the work you have done for your employer, especially if you are a farmworker. Write down the date you worked. You should also write down the number of hours you worked on that day or the amount of work you performed. For example, you might write down the number of acres of corn you detasseled. Your employer must also give you a written pay statement each time you are paid, showing the total number of hours you worked and—if you are paid on a piece-rate basis—the number of pieces completed during the pay period. Having your own records and the paystubs from your employer is helpful. If you have both, you can review your paystubs and make sure your employer has paid you the minimum wage for all the work shown by your own records.

Save your own records and your pay stubs because an attorney will want to review these documents to assess your claims.



OR

• call 800-532-1275• Iowans age 60 and over,

call 800-992-8161


Lorraine Gaynor is a staff attorney in Iowa Legal Aid’s Iowa City Regional Office.

The Fair Labor Standards Act Helps Farmworkers & Other Workers Get Their Fair Pay

Iowa Legal Aid Helps with Pension ProblemsIowa Legal Aid provides FREE help with your pension issues! You can call our toll-free number at 1-800-992-8161. Des Moines-area residents can also call 282-8161.

The Pension Rights Project provides help with employer, union and government pensions including traditionally defined benefit plans and 401(k)’s. Our services include:

• Contacting pension administrators on your behalf;

• Finding “lost” pension funds when companies merge or go out of business;

• Helping you apply for benefits;• Helping with appeals if your pension is

denied;• Getting survivor benefits;• Checking benefit calculations;• Assisting with pension issues in divorces;• Sending out information about pension

issues.The U.S. Administration on Aging partially funds The Pension Rights Project. Services are free to all Iowans without regard to age or finances.


By Angela Broughton-Romain

Renters throughout Iowa may risk los-ing their homes for a single violation of so-called crime-free housing laws. This

situation is true, even if no crime is proved, and even if the alleged crime didn’t involve anyone named on the lease.

Many private landlords include crime-free lease terms in standard leases. They do this to avoid violating local laws allowing cities to punish landlords who own properties where there may have been criminal activity. These lease provisions and ordinances catch many tenants off-guard. They may disproportionately affect communities of color in Iowa. Some provisions may be legally challengeable.

BackgroundThe Crime-Free Multi-Housing Program started in Arizona in 1992. Since then, about 2,000 cities across the country have rolled out similar programs. These programs have the stated goal of improving safety in rental properties. Some cities require landlords to include a crime-free lease term in their rental agreements. Others create an incentive for landlords to do so by creating specified crime property or nuisance property laws. Under these laws, property owners can be fined or face other negative actions if criminal activity is alleged to have occurred at their properties. Law enforcement officers can initiate actions against landlords and other property owners under these ordinances. Several cities in Iowa have adopted specified-crime or nuisance property ordinances and/or ordinances that require landlords to include crime-free lease terms. Other cities in Iowa have established crime-free lease programs on a voluntary basis.

What do crime free housing programs and laws prohibit?What crime-free lease provisions and related ordinances prohibit can vary. In general, crime-free lease provisions forbid a resident, any member of the resident’s household, or even a guest, from engaging in criminal or illegal activity. However, these provisions often include vague terms and require little proof. Notably, the alleged criminal activity does not require evidence of a conviction. In addition, the activity does not always have to occur within the rental unit itself.

Specified-crime and nuisance property ordinances also define standards differently, depending on the city. For example, some focus on the number and type of police calls made from an address. This can discourage crime victims, including domestic violence victims, from seeking help. To address this concern, in 2016, the Iowa Legislature passed the Right to Summon Emergency Assistance Law to make clear that a landlord cannot take action against a tenant for calling 9-1-1 to report a crime.

These lease terms and local laws define criminal activity very broadly. Even minor offenses that do not affect public safety, such as the violation of a noise ordinance, could jeopardize a tenant’s housing. Similarly, contract and ordinance language allows for

abuse by landlords and law enforcement where an allegation of a catchall offense such as disorderly conduct or disorderly house could trigger a decision to terminate a tenant’s lease.

Possible discriminatory effects Although race-neutral on their face, enforcement of crime-free lease provisions and related ordinances has a disproportionately harsh effect on African-Americans. Statistics show that this group experiences more frequent contacts with law enforcement. This provision raises the question of whether these policies violate fair housing law.

The federal Fair Housing Act and the Iowa Civil Rights Act prohibit discrimination in housing based on race and other legally protected characteristics. Unlawful discrimination includes intentionally treating someone differently because of race (disparate treatment discrimination). It also prohibits taking action that has discriminatory effects because of race (disparate impact discrimination).

In Iowa, there is evidence that African-Americans are arrested at a much higher rate than other racial groups. Specifically, the arrest rate of African-Americans in Iowa is 11 times the arrest rate for Caucasians. Further, in 2013, a national American Civil Liberties Union study found that Iowa had the largest racial disparity in the country for arrests for marijuana possession.

These arrest statistics suggest that policies based on allegations of criminal conduct could have a disparate impact on African-Americans, although Iowa’s crime-free lease provisions and related laws have not yet been formally challenged. The U.S. Department of Housing and Urban Development has issued guidance on crime-free housing and nuisance ordinances. This guide warns that these laws may violate fair-housing laws, including the duty to affirmatively further fair housing.

Possible remediesIf you receive a notice of an alleged violation of a crime-free lease provision or related ordinance, you may have rights. If you are a tenant, you may have defenses under Iowa landlord-tenant law. This law, among other things, requires proper notice of any lease termination. If you are a property owner or a tenant, you may be able to challenge the crime-free housing or nuisance ordinance on constitutional grounds. Tenants and property owners also may be able to assert claims under federal or state fair housing laws.



OR


call 800-992-8161


Angela Broughton-Romain is a staff attorney with Iowa Legal Aid’s Legal Hotline for Older Iowans.

Beverly Whiteaker Named 2017 Volunteer of the Year

Beverly Whiteaker, long-time volunteer in the Southwest Regional Office, received the Human Services Advisory Coun-

cil’s 2017 Volunteer of the Year award. The Human Services Advisory Council is a group that helps Council Bluffs not-for-profit orga-nizations work better together. This award recognizes a volunteer’s dedication and com-mitment to the community through human service-related volunteer activities. “Her ser-vice to our clients has been remarkable,” said Shelley Whitcher, managing attorney of the Southwest Regional Office. “She is a welcom-ing face when someone walks into our office.”

Beverly has volunteered at Iowa Legal Aid for more than 20 years. She has given more than 10,000 hours of her time to serve Iowa Legal Aid clients.

Dennis Groenenboom Honored with National Award

On December 8, the National Legal Aid and Defender Association recognized Dennis Groenenboom, Iowa Legal

Aid’s former executive director, with the 2017 Charles Dorsey Award. The Charles Dorsey Award honors an individual who has provid-ed extraordinary and dedicated leadership to the equal justice community and to orga-nizations that promote access to justice for low-income people. This is a wonderful honor that recognizes Dennis’ hard work over the decades to ensure equal justice for all—regard-less of ability to pay.

Dennis Groenenboom at the 2017 National Legal Aid and Defender Association Conference in Washington, D.C.

Shelley Whitcher, left, managing attorney of the Southwest Regional Office, and Beverly Whiteaker

Crime-Free Lease Provisions and Ordinances Place Housing at Risk, Especially in Communities of Color


IOWA LEGAL AID DISASTER LEGAL ASSISTANCE MOBILE APPIowa Legal Aid Disaster Legal Assistance Mobile App Available in the iTunes and Google Play Stores

By Joshua Gaul

It is important to plan for disasters. The more you prepare ahead for a disaster, the faster and easier it may be to recover. If

you are experiencing the effects of a disaster, you may face many different legal problems. The Iowa Legal Aid Disaster Legal Assistance Mobile app is designed to help people by providing tools to prepare in advance for a disaster and for people who are experiencing the effects of a disaster.

The app helps you prepare for a disaster by:

• A preparation kit checklist that suggests important items you should have ready to go at a moment’s notice.

CRIME VICTIM COMPENSATION & RESTITUTION: ARE YOU ELIGIBLE?By Nathan Peters

If you or a loved one are a victim of a crime, sometimes there are ways help to make yourself whole again. For example, the

Crime Victim Compensation Program may help those who have a physical or emotional injury caused by a violent crime. Also, if a court orders restitution in a criminal case, the victim can take steps to collect it.

Crime Victim Compensation ProgramThe Crime Victim Compensation Program helps victims of violent crime. The program covers some expenses related to injuries from that crime. It is funded entirely by fines and penalties paid by people found guilty of crimes, and not by taxpayers.

The program pays for crime-related expenses. These include things like medical care, counseling, lost wages, and funeral expenses. It only covers costs that are not covered by insurance or other sources. The program can also pay for crime-scene clean-up, replacement of clothing held as evidence, replacement of security items, child or dependent care, housing/shelter expenses, relocation expenses, and travel.

Iowans eligible for help through this program are:

• crime victims who are physically or emotionally injured in a violent crime in Iowa;

• Iowans injured by a violent crime

• The checklist allows you to check off each item so that you can keep track of what is ready to go.

• An emergency plan feature that helps you or your family think about where to meet in the event of a disaster, and: • where you can stay, and • who you should contact to notify

where you are and whether you are OK.

• A rally location feature that provides GPS navigation to a meeting spot selected by the user.

• The app then generates a code that can be shared with other users of the app.

• If the other users enter that code into their own rally location feature, they will receive GPS navigation to the same meeting spot.

• The tool could be particularly helpful in the event a family is separated when a disaster hits.

• An insurance records area where you can upload important insurance information so that you will have it when you need it.

After a disaster strikes, the app allows you to get information on the latest disaster declarations in Iowa.

The app generates timely information on:

• sources of aid, where to apply, and any deadlines you may be facing,

• real-time weather alerts through a news feed in the app.

In the event of a major disaster, the app allows you to:

• chat Iowa Legal Aid staff,• locate emergency shelters, and • receive push notifications (similar to text

messages) with vital information. The app also contains:

• Articles and information on disaster recovery and your legal rights.

• Links to other websites that contain helpful disaster relief information.

• Links and contact information about disaster relief and human services agencies using the app.

If you’re involved in disaster response, you can use the app to refer a survivor to Iowa Legal Aid using the disaster responder referral form.

The app will better prepare you for a disaster. Share this information with your friends and family so more Iowans can be better prepared when the need arises.

You can find the app by searching for “Iowa Legal Aid” in the iTunes or Google Play stores.

This app was developed with funds provided by a Legal Services Corporation Midwest Legal Disaster Coordination Grant and the Greater Cedar Rapids Community Foundation.

Joshua Gaul is a staff attorney in Iowa Legal Aid’s Central Iowa Regional Office.

in another state or country without a federally-approved crime victim compensation program;

• survivors of a homicide victim;• victims injured in crimes of drunk

driving, hit and run, or reckless driving or boating; vehicular homicide, or the use of a vehicle as a weapon; or

• a victim’s spouse, children, parents, siblings, and person(s) residing in the household at the time of the crime.

To be eligible for this help, you must:

• Report the crime to law enforcement within 72 hours, unless there is a good reason for not doing so.

• Apply to the Crime Victim Compensation program within two years of the date of the crime, or show a good reason to delay.

• Cooperate with the reasonable attempts of law enforcement and prosecutors in the investigation and prosecution of the crime.

• NOT have consented to or provoked the crime committed against you.

• NOT have been attempting, assisting, or committing a criminal act yourself at the time of the crime that directly caused your injuries.

To request this help, complete an application, sign all three releases, and return it to the Crime Victim Compensation Program. You can send it either by mail or through an online form on the Attorney General’s website. After reviewing the application, they may request additional information. You do not need a lawyer to receive program benefits. For more information and frequently asked questions, go to iowaattorneygeneral.gov/for-crime-victims/crime-victim-compensation-program/.

Collecting restitution Often, when a criminal case involves a victim, a court will order the convicted person to pay the victim some amount of restitution. Restitution is an amount of money a court may order someone to pay to a victim to help

make them whole again. Iowa courts can order restitution in violent crimes, as well as other types of crimes. When a court orders a convicted person to pay restitution to a victim, the victim can collect the money in several ways. For example, the victim can garnish the convicted person’s wages or bank accounts. Prosecutors can collect on a restitution order on behalf of the victim, but they are not required to. If a prosecutor does not collect on an order, a victim can collect on his/her own by filing the same paperwork that is filed to collect a civil judgment.

A victim can also file a restitution lien on any real property, such as a house, owned by the convicted person. Before filing a restitution lien, make sure you have paperwork showing:

• the name and birth date of the convicted person;

• court papers from the criminal case including the name of the court, the title of the case, and the court’s file number;

• your name, address, and business address;

• a statement that the lien is being filed under Iowa Code section 910.10; and

• the amount of victim restitution that the court ordered the convicted person to pay. Iowa Legal Aid provides help to low-income Iowans.


OR


call 800-992-8161


Nathan Peters is a staff attorney in Iowa Legal Aid’s Waterloo Regional Office.


Tax Changes continued from outside front cover

Personal exemptions eliminated The new tax law eliminates the personal exemption and exemptions for your children and dependents. The personal exemption is currently $4,050 per person. The idea is that a higher standard deduction will cover this reduction. But even though you may not need to claim your dependents, you will still need to include them on your return if you qualify for certain tax credits. These include the Earned Income Credit, Child Tax Credit, or the new $500 per person Family Tax Credit. The Family Tax Credit is for dependents who do not qualify for the child tax credit.

Filing requirementsBeginning in 2018, the amount of income you must have to be required to file a tax return will be higher. The income level that triggers a filing requirement will match the standard deduction for all statuses. For example, married taxpayers filing a joint return will not be required to file a return unless they earn $24,000 in income. Even if you are not required to file a tax return, it may still be in your interest to do so. For example, you should file a return if you had money withheld from your paycheck for income taxes, or if you are entitled to a refundable credit, like the child tax credit or earned income credit.

Itemized deductionsFor taxpayers that itemize their deductions, the new law includes significant changes. For

tax years 2018 through 2025, all miscellaneous itemized deductions subject to the “2% floor” are suspended. This floor includes common deductions like unreimbursed employee expenses (such as uniform expenses, travel expenses, meals, license fees and union dues), tax preparation expenses, and hobby expenses, among others. If you typically take the standard deduction on your return, this change will not affect you.

Child tax creditBecause the loss of itemized deductions and personal exemptions may significantly impact families, the Child Tax Credit will increase to $2,000 per child beginning in 2018. Even if you owe no tax, you will get $1,000 to $1,400 if you are eligible for the credit. The new law lowers the minimum earned income you need to qualify for the credit from $3,000 to $2,500. The credit will only apply to children age 16 years old and younger. The child must have a Social Security number issued before the due date of the return.

Student loansGenerally, if you owe a debt and the company or bank that you owe money to forgives the debt, that forgiven debt counts as taxable income. The new law changes the rules so that student loans forgiven due to death or total and permanent disability will no longer be taxable.

Taxpayers who are repaying student loans can still claim an adjustment to their income

of up to $2,500 for interest paid on the loans. This adjustment does not require the taxpayer to itemize, and it is claimed on the first page of the Form 1040.

There are many other tax-law changes not discussed in this article that lie ahead for taxpayers. Congress could also change the law again. It is important to get reliable information about your situation, so you can make the decisions that are right for you. If you are having problems with the IRS or questions about your taxes, contact a Low-Income Taxpayer Clinic or other tax professional to get help. If you have questions about your tax rights and responsibilities, Iowa Legal Aid’s Low-Income Taxpayer Clinic may be able to help.

• To apply for help from the Low-Income Taxpayer Clinic:• call 800-532-1275

OR• apply online at IowaLegalAid.org

• NOTE: The information in this article is not a substitute for legal advice. As a general rule, Iowa Legal Aid’s Low-Income Taxpayer Clinic does not prepare tax returns.

Andrea Buckley is a staff attorney in Iowa Legal Aid’s Northwest Iowa Regional Office in Sioux City.

AVOIDING UTILITY SHUTOFFS AFTER THE END OF THE WINTER MORATORIUMBy Ben Hamel

As we near the end of another winter, many of us welcome the spring. But for Iowans with utility debt, the anx-

iety and stress of a utility services shut-off will soon become a harsh reality. The “winter moratorium” between November 1 and April protects low-income customers from discon-nection. The law provides that a resident who is head of household and eligible for energy or weatherization assistance cannot be discon-nected. A local community-action program must certify people who take advantage of this law.

Beginning April 1, the protection of the winter moratorium will end. This means Iowans with utility debt will once again be in danger of disconnection. If you know you have a large utility debt, the following strategies may prevent a shut-off:

(1) setting up a payment plan with the utility company based on your ability to pay;

(2) requesting a 30-day postponement if you have a medical condition that will be affected by the shut-off; or

(3) finding someone else with good credit who is willing and able to open a new account for the property in his or her name (the Good Samaritan Rule).

Option One: Reasonable payment plan When a customer has a past due bill for gas or electric service and is not behind on a prior payment plan with the utility, the utility must offer the customer a payment plan. This plan must be based on the customer’s ability to pay. For customers disconnected for 0 to 120 days, the utility must offer a payment plan with a minimum of 12 equal monthly payments. For customers disconnected for more than 120 days, the utility must offer a minimum of six equal monthly payments. In both cases, though, the number of payments is the minimum. The plan can be spread out longer, based on the customer’s ability to pay.

Some customers are entitled to a second payment plan, even if their previous plan failed. To be eligible for a second payment plan, a customer must have made at least two full payments in a row under the first plan before falling behind. A customer should contact the utility as soon as possible if he/she falls behind on payments.

Option Two: Medical postponement If someone living in the household has a serious health condition, another option is to request a 30-day medical postponement. Medical postponements cover a wide range of physical and mental-health problems. Before making this type of request, a customer should contact his/her healthcare provider and ask

for something in writing on the provider’s letterhead. The writing needs to confirm that disconnecting the utility would be a special health danger to a household member.

Option Three: “Good Samaritan” Another option that a customer can use when facing disconnection is to use a third party. This is referred to as the “Good Samaritan” regulation. This regulation provides that a utility cannot refuse service to a would-be customer because of “delinquency in payment for service by an occupant if the customer applying for service is creditworthy and able to satisfy deposit requirements.” The utility cannot deny service to the Good Samaritan (a friend or relative, for example) offering to assist the delinquent customer.

What do I do if the utility company does not accept my request? Sometimes utilities push back when customers use these strategies to avoid shut-off. For example, a utility might demand an installment plan that a customer cannot reasonably afford. Or, a utility might respond that a medical reason is not good enough to avoid shut-off. In those cases, a customer can file a complaint with the Iowa Utility Board. The Board will then decide if the customer’s request is reasonable. The Utility Board’s complaint review puts the shut-off on hold.



OR


call 800-992-8161


Ben Hamel is a staff attorney in Iowa Legal Aid’s Northeast Iowa Regional Office in Dubuque.


TAX REDUCTION FOR LOW INCOME IOWANS OWNING MOBILE HOMES There is no disability or elderly requirement for this benefit.

Iowans over 23 years of age at the end of 2017 with annual income less than $22,855 may benefit from reduced taxes on a mobile or manufactured home. The home must be located in a manufactured home community or mobile home park. You must own the home and live in it.

Modular homes are not eligible for this program unless they are placed in a manufactured home community or mobile home park that was in existence on or before January 1, 1998.

A claim for this reduced tax rate is filed with your county treasurer between January 1 and June 1 of 2018. Contact your county treasurer for an application form.

If you are paying lot rent, you may also apply for rent reimbursement.

If your mobile home is not in a mobile home park and is being taxed as property, it is only eligible for property tax credit. You must be elderly (65-plus years) or have a disability to earn the property tax credit.

By Fred Nelson

Each year, Iowans who are elderly or have a disability may benefit from:

• a property-tax credit on their home; and• rent reimbursement for an apartment or

mobile home lot rent.To be eligible for these programs in 2018,

you must:

• have household income during 2017 of less than $22,855; and

• in 2017, be at least 65 years old OR at least 18 years old and have a disability.

Remember, you must apply each year for these programs!

The Iowa Department of Revenue and Finance sets the formula for the credit or reimbursement. Property tax credit, rent reimbursement, or tax reduction programs are based on your 2017 household income. Household income includes:

• Social Security; • wages;• pension; • interest income; and• money received from others.If you receive a rent subsidy, the amount

of your subsidy also counts as income. If you earn income from a business, only the net profit from the business is included.

What property can qualify?The credit or reimbursement may only be used for your homestead. Your homestead is the dwelling you owned or rented as your home during 2017.

• If you own a mobile home and live in it on a rented lot, you may apply for both rent reimbursement for the lot rent and a reduced tax rate on your mobile home.

• If you live in a mobile home on your own property, you may apply for a property tax credit.

• If you live in an apartment, the building must be subject to property tax. Apartments owned by nonprofits (like a church) or government entities (like a city, county or state) generally do not pay property taxes.

• If you are not sure whether your apartment pays property taxes, ask your landlord or county treasurer.

• In some cases, residents of a nursing

home may also be eligible for rent reimbursement or a property tax credit.

• If you are in a nursing home but still own and maintain your homestead, you can apply for the property tax credit.

• If you live in a nursing home and no longer own a home, you may be eligible for rent reimbursement.

• To apply for rent reimbursement, you will need to find out from the nursing home how much of your total payment is for rent.

When and how to applyAlthough deadlines are sometimes extended, you should apply between January 1 and June 1 of 2018 to get a rent reimbursement for 2017 or property tax credit or reduced tax rate for 2018.

Rent reimbursement is money that will be sent directly to you. The property tax credit will show up as reduced property taxes for next year. If you have a mortgage on your home, this could mean a reduction in your future monthly payments if they include an amount to pay your property taxes.

• To receive the form to apply for rent reimbursement, call the Iowa Department of Revenue and Finance at 800-367-3388 and dial 5 to speak with a representative. In recent years, forms for rent reimbursement are automatically sent out by the Department of Revenue to people who have previously been receiving rent reimbursement benefits.

• Contact your county treasurer about forms for the property tax credit or mobile home reduced tax rate.

• Find the forms and instructions on how to apply for all these programs on the Iowa Department of Revenue website. Go to: https://tax.iowa.gov/

Appeal rightsIf you are denied benefits or the amount of your claim is reduced, you have appeal rights. You have 30 days from the date of the notice to appeal. You may appeal to the Director of the Department of Revenue; a hearing is then scheduled and held. The hearing decision is mailed to you. If you disagree with the decision, you have a right to judicial review. An appeal to the Department of Revenue for a tax claim is a complicated process.



OR


call 800-992-8161


Fred Nelson is a staff attorney with Iowa Legal Aid’s Legal Hotline for Older Iowans.

Rent Reimbursement and Property Tax Credits for Iowans Who are Elderly or Have a Disability

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first quarter 2018 equalqual j justicusticee …...what are payday loans? payday loans are...

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