New Jersey—Personal Income, Property Taxes: Changes for 2011 Announced

The New Jersey Division of Taxation has announced changes for gross (personal) income taxes and property taxes for 2011, the most significant of which are discussed below.

Personal Income Tax Changes

First, the filing deadline for personal income tax returns is April 17, 2012, for calendar year taxpayers, which is the same day the federal Form 1040 is due. The due date is April 17 instead of April 16 because of the Emancipation Day holiday in the District of Columbia.

Taxpayers who converted an existing IRA to a rollover Roth IRA during the 2010 tax year and made a federal election to report the income in equal installments in 2011 and 2012, must report one-half of the amount that is taxable for New Jersey purposes on their income tax return for 2011.

For purposes of the property tax deduction/credit, to calculate the correct amount of property taxes paid on their New Jersey principal residence, homeowners must know whether they received a homestead benefit during 2011, the amount of the benefit, and whether the benefit was paid as a credit on their 2011 property tax bill or in the form of a check. For tenants, 18% of the rent paid during the year is considered property taxes paid.

For purposes of the credit for taxes paid to other jurisdictions, the Philadelphia nonresident wage tax rate for 2011 is 0.034985.

For 2011, the maximum employee unemployment insurance/workforce development partnership fund/supplemental workforce fund contribution was $125.80, the maximum employee disability insurance contribution was $148.00, and the maximum employee family leave insurance contribution was $17.76. Taxpayers with two or more employers who have contributed more than the maximum amount(s), must complete Form NJ-2450 to claim credit on their New Jersey tax return for the excess withheld.

Homestead Benefit Program and Property Tax Reimbursement Changes

New Jersey residents who owned and occupied a home in New Jersey that was their principal residence on October 1, 2011, may be eligible for a homestead benefit, provided the 2011 property taxes were paid and they meet certain income limits. The homestead benefit application for homeowners is not included in the NJ-1040 booklet. Information about the 2011 homestead benefit will be posted as it becomes available. There is no tenant rebate application available for 2011 because tenant rebates for 2009 and 2010 were suspended.

The Property Tax Reimbursement (Senior Freeze) Program reimburses eligible senior citizens or disabled persons for property tax increases. Eligible residents must file a 2011 Property Tax Reimbursement Application (Form PTR-1 or PTR-2) by June 1, 2012. The 2011 PTR applications are expected to be mailed in mid to late February.

Notice, New Jersey Division of Taxation, December 13, 2011