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Property Tax Deduction/Credit Eligibility Requirements. All the following must be met: You must have been domiciled and maintained a principal residence as a homeowner or tenant in New Jersey during 2011; and

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property tax deduction credit eligibility requirements
Property Tax Deduction/CreditEligibility Requirements
  • All the following must be met:
    • You must have been domiciled and maintained a principal residence as a homeowner or tenant in New Jersey during 2011; and
    • Your principal residence, whether owned or rented, must be subject to local property taxes, and property taxes must have been paid on that residence either as actual property taxes or through rent; and
    • Your rented dwelling must have its own separate kitchen and bath facilities; and
    • Your gross income on Line 28 is more than $20,000 ($10,000 if filing status is single or married/CU partner, filing separate return), oryou (and/or your spouse/civil union partner if filing jointly) were 65 years of age or older or blind or disabled on the last day of the tax year.
property tax deduction credit eligibility discussion
Property Tax Deduction/CreditEligibility Discussion
  • 18% of rent is treated as property tax
  • If you were not a full-year resident, or you shared ownership / rent with others, or you occupied only part of the residence, then see NJ-1040 Instructions (Worksheet F-1) for how to calculate amount you can apply
    • It is possible to have both (direct) property taxes and rent apply in the same year. (e.g. if own for part of the year and rent for the remainder)
    • It is NOT possible to apply property tax or rent for more than one residence for the same time period because only one can be considered your “principal residence”
property tax deduction credit eligibility discussion con t
Property Tax Deduction/CreditEligibility Discussion (con’t)
  • “subject to local property taxes”
    • Owners in a P.I.L.O.T. (Payments in lieu of taxes) Program are not considered to be subject to local property taxes
    • Tenants of State / County / Municipality owned buildings or other exempt housing may not pay local property taxes – check with landlord to be sure
  • “taxes must have been paid”
    • Only get to count amount actually paid (e.g. if delinquent or exempt)
    • Amount paid is before any prior year Homestead Benefits have been applied
    • Amount paid for PTR participants is Base Year Amount
  • Worksheet F used to analyze which is better: Deduction or Credit
property tax deduction credit special situation
Property Tax Deduction/CreditSpecial Situation
  • If you are below the NJ filing threshold and you are either 65 or older or blind/disabled on the last day of the tax year and you are eligible for a property tax credit as either a homeowner or tenant, then
    • If you are eligible and file for a 2011 homestead benefit because you were a New Jersey homeowner on October 1, 2011, then
      • Your credit will automatically be included with your homestead benefit. If you are filing Form NJ‑1040, do not complete Line 36c to claim a property tax deduction or Line 48 to claim a property tax credit.
    • If you are not eligible for a 2011 homestead benefit because you were not a homeowner on October 1, 2011, then
      • You may claim the property tax credit on Form NJ-1040 or you can file the property tax credit application, Form NJ-1040-H only. Do not file both Form NJ-1040 and Form NJ-1040-H.
property tax deduction credit taxwise tips
Property Tax Deduction/CreditTaxWise Tips
  • Worksheet is on NJ 1040 Pg4 F (used to calculate deduction or credit)
  • The amount from federal Schedule A, line 6, box 3 will flow to an informational box on Worksheet F, but you must manually enter the correct amount of property tax (and/or rent) in the appropriate Worksheet F box(es).
  • See NJ Special Handling document for details on when and how to fill out Worksheet F (this can be tricky)
property tax deduction credit taxwise how to fill out wkt f
Property Tax Deduction/CreditTaxWise – How to fill out Wkt F

(If and only if required by procedure above)