In September of 2023, we reported on the existing and pending legislation offering property tax relief to New Jersey homeowners and tenants . A Stay NJ Task Force was appointed to develop recommendations for “establishing and funding uniform property tax relief to all senior citizen homeowners and tenants making under $500,000 per year”. The goal was to establish the criteria for the Stay NJ benefit and to make the three sources of relief (Senior Freeze, ANCHOR, and Stay NJ) more streamlined and consistent.
Governor Murphy signed P.L. 2024, c.88 into law on November 1, 2024 to accomplish those goals. What can you expect as a result?
- A combined application which should be available no later than February 1, 2025 that will be used to determine eligibility for the programs.
- A uniform definition of income to determine eligibility for the Senior Freeze and Stay NJ Programs. Income will be defined as New Jersey gross income before deductions and exclusions PLUS income not taxable in New Jersey from: payments received under the federal Social Security Act, pension and annuity income, interest not taxable for New Jersey purposes, other retirement income, and income from distributions from Roth IRAs excluded from taxation.
- The initial cap on the Stay NJ program is 50% of the claimant’s tax bill up to $6,500. That amount will be adjusted going forward based on the average increase in real estate tax bills in the state. Payments will be made first under the ANCHOR and Senior Freeze programs and that total will be deducted from the Stay NJ maximum benefit; the difference will be the Stay NJ benefit payable.
- The maximum $15,000 real estate tax deduction for New Jersey Gross Income Tax for real estate taxes billed and paid has been changed to a maximum of $15,000 reduced by the real estate tax relief received from these programs.
Claimant must be a New Jersey resident on December 31of the benefit year, at least 65 years old, and the owner for at least one year of a homestead in New Jersey.
The refunds will be scheduled:
- Senior Freeze starting in July
- ANCHOR beginning in September
- Stay NJ beginning in November, but the program’s first year is 2026.
- These programs are expected to take some of the bite out of the high real estate tax bills New Jersey is known for. If we can help you navigate the application, please contact your tax preparer.
Contributed by Lois S. Fried, CPA, CFE, CVA, ABV
