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New Jersey Property Tax Relief Programs

NJ-2 Property Tax Relief Programs v11.1 VO.pptx. New Jersey Property Tax Relief Programs. Property Tax Deduction or Credit Homestead Benefit Senior Freeze (PTR) Other. NJ Property Tax Relief Programs. Property Tax Deduction or Credit Part of NJ-1040 (or, possibly, separate NJ-1040-H)

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New Jersey Property Tax Relief Programs

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  1. NJ-2 Property Tax Relief Programs v11.1 VO.pptx New Jersey Property Tax Relief Programs Property Tax Deduction or Credit Homestead Benefit Senior Freeze (PTR) Other Tax Law Training (NJ) TY2011 v11.0

  2. NJ Property Tax Relief Programs • Property Tax Deduction or Credit • Part of NJ-1040 (or, possibly, separate NJ-1040-H) • Homestead Benefit Program • aka Homestead Rebate / NJ Saver Rebate / FAIR Rebate • Property Tax Reimbursement (PTR) • aka Senior Freeze • Other • Deduction for Senior Citizens / Disabled • Deduction for Veterans • Exemption for Disabled Veterans Tax Law Training (NJ) TY2011 v11.0

  3. NJ Property Tax Deduction or Credit Homeowners and Tenants NJ taxable income deduction or tax credit ($50), whichever is most beneficial Most beneficial approach calculated on Worksheet F – Property Tax Deduction/Credit, included with NJ 1040 Pg4 Eligibility requirements: Must have paid real estate tax or rent on principal residence in NJ If rent, then unit must have own kitchen and bath If under 65 and not blind or disabled, then gross income must be more than $20,000 ($10,000 if Single or MFS) If 65 or older or blind or disabled, then no income limitation Tax Law Training (NJ) TY2011 v11.0

  4. NJ Property Tax Credit - TaxWise • If TP IS already filing a NJ-1040 • TaxWise will calculate credit (or deduction) correctly in most circumstances. • If TP is under NJ filing threshold AND the TP is either 65 or over, or blind or disabled AND TP IS entitled to a $50 credit, then TaxWise does NOT automatically calculate the $50 credit on the NJ Form-1040 Pg4, line 48 – So what to do: • Preferred: Manually input the $50 credit on the NJ-1040 Pg4, line 48 (NJ-1040-H is NOT an option if filing NJ-1040) • Alternative if TP will get Homestead Benefit: Do nothing now and hope that $50 automatically added to Homestead Benefit • If TP is NOT already filing a NJ-1040 and is entitled to $50 property tax credit: • Best option: File NJ-1040 anyway and manually input the $50 credit on NJ-1040 Pg4, line 48 • Other options: • Homeowners who file Homestead Benefit Application get $50 automatically added to Homestead Benefit • Tenants and homeowners who are not eligible for Homestead Benefit (e.g. not a homeowner on Oct 1, 2010) mustfile a NJ-1040-H to claim the $50 credit Tax Law Training (NJ) TY2011 v11.0

  5. Homestead Benefit Program Tax Law Training (NJ) TY2011 v11.0 • Property tax reduction for Homeowners who occupied their principal residence on Oct 1st • Paid Property tax • 2011 Property Tax reduction application mailed in Aug/Sep 2011 for completion and submission (based on principal residence on Oct 1st 2010) • Used to receive separate check with Benefit amount (prior to 2010). • Will receive Benefit as reduction of future property tax bill (2011 onward). • There some situations where will still receive separate check (e.g. Condo owners)

  6. Impact on Federal return for Homeowners • For 2011 – No Benefits/Rebates paid, so no need to handle on federal return (Sch A or 1040, line 21) Tax Law Training (NJ) TY2011 v11.0

  7. PTR (NJ Senior Freeze) “Freezes” local property tax in first year of eligibility (Base Year) Total local property tax paid to local municipality State of NJ reimburses homeowner for taxes paid in excess of base year taxes Forms – PTR 1, Property Tax Reimbursement, completed by TP in first year eligible PTR 2 – Sent to TP with certain pre-printed data from State of NJ in subsequent year(s) and completed by TP Must submit proof of taxes paid with PTR’s Eligibility Age 65 or older, or receiving Federal S/S Disability Benefits Lived in NJ for at least last ten years Owned and lived in home for at least last three years Meet total income limits for base year and each succeeding year Tax Law Training (NJ) TY2011 v11.0

  8. NJ Property Tax Relief – OtherAll Administered By Local Municipality Annual Property Tax Deduction for Senior Citizens, Disabled Persons:Annual deduction of up to $250 from property taxes for homeowners age 65 or older or disabled who meet certain income and residency requirements. Annual Deduction for Veterans:Annual deduction of up to $250 from taxes due on the real or personal property of qualified war veterans and their unmarried surviving spouses/surviving civil union partners/surviving domestic partners. Property Tax Exemption for Disabled Veterans:Full exemption from property taxes on a principal residence for certain totally and permanently disabled war veterans and their unmarried surviving spouses/surviving civil union partners/surviving domestic partners. Unmarried surviving spouses/surviving civil union partners/surviving domestic partners of servicepersons who died on wartime active duty may also qualify. Tax Law Training (NJ) TY2011 v11.0

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