New Jersey taxpayers bear one of the highest state and local tax burdens in the country, a fact that wasn’t lost on voters in the most recent gubernatorial election. Residents generally took some solace in the fact that they receive, on average, a significant amount of services from the government (including well-funded and high-performing public schools) and occasionally, got a little something for their troubles in the form of homestead rebates.
Not this year.
New Jersey is changing the way that it handles homestead benefits. And New Jersey residents are not happy. One of those residents was kind enough to pass along her 2009 Homestead Benefit Application to me for review for the blog. It was mailed out in September 2010 for the 2009 tax season; the filing deadline is November 1, 2010.
The application packet contained a number of papers. The one that caught the taxpayer’s eye, though, notified her that she would not be receiving a check this year as she had in prior years (you can download the notice as a pdf). Instead, the benefit would be applied towards her property tax bill for the second quarter of 2011. The notice also advised the taxpayer that if she moved after she filed her application, she won’t get the benefit even though she paid her 2009 taxes and otherwise qualified; the benefit runs with the property, not the owner/taxpayer.
In years past, New Jersey would issue a check outright to those who were eligible for the rebate. For 2009, to be eligible, you must be a New Jersey resident who owned and occupied a principal residence in the state as of 12:01 a.m. on October 1, 2009. In addition, you must have paid property taxes on the property during 2009. Seniors and those who were disabled were subject to an income limit of $150,000 or less; homeowners under age 65 and not blind or disabled were limited to $75,000 or less.
This year, however, checks will not be mailed out. There’s no real explanation as to why but you and I can figure it out. The state’s web site for the former “homestead rebate” program (the web site title tag has not been change dto reflect the new name as the “homestead benefit”) merely refers to “modifications” to the program in the State Budget for FY 2011.
But the whispering along the lane has already begun… After several states delayed income tax returns last tax season due to holes in the budget, taxpayers wonder: Is New Jersey next?
KPE-
It is much “more better” to use the NJ Homestead “benefit” amount as a credit against the actual real estate tax, thus allowing the homeowner to actually pay less tax upfront, then to send out a rebate check.
(1) A rebate check, whether the NJ Homestead rebate or George W’s previous 2 rebate fiascos, is a political gimmick to buy votes. I do believe that the NJ rebates initially were mailed out on November 1st, so voters could run to the poles on election day and vote for the Democrats as a “thank you”. Similarly a voter getting a rebate check in the mail was expected to say, “Look what George W has given me!” and vote Republican in the next election.
(2) By receiving a rebate check in, say, 2009 – a refund of real estate taxes previously paid in 2008 (and in most cases previously deducted on 2008 Schedule A) – one has a potential taxable income problem, similar to the way state income tax refunds are treated. This could be costly if partially taxed Social Security or Railroad Retirement is involved. However directly paying, and deducting, less real estate in 2010 removes any potential income tax agita.
To give him some due – I do believe that Corzine had originally proposed using the credit against tax instead of actual rebate check when he first took office – before he lost male body parts and returned the running of the state back to the crooked Democratic party.
TWTP
I just received this notice in the mail yesterday. I am a little annoyed that they are not sending a check but rather issuing a credit but am still happy to be receiving this “benefit.” NJ property taxes are so high that any opportunity to lower my tax bill makes me happy.
Why did we have to apply for homestead rebate in the first place if you knew it was cut out. I,m glad for homeowners but sad for tenants as my husband and I are, both dissable and low income.