Wednesday, May 27, 2015


The taxes imposed by the State of New Jersey are among the highest taxes in the country – sales tax, income tax, estate and inheritance tax, and especially property tax.  The only tax that does not rank in the top 5 is the state’s gas tax.  While not the major factor in my move to PA it was certainly a secondary one.

To provide some relief to NJ homeowners, especially seniors and the disabled, the state has two Property Tax Relief programs – the NJ Homestead Benefit and the Property Tax Reimbursement (aka Senior Freeze).

The Property Tax Reimbursement (PTR) program “reimburses eligible senior citizens and disabled persons for property tax or mobile home park site fee increases on their principal residence”.

A qualifying homeowner establishes a “base year” by having two consecutive years within a certain income threshold ($80,000, indexed for inflation beginning with tax year 2012).  Once the base year has been established each year that homeowner will receive a check from Trenton for the difference between the property taxes assed by their municipality and the base year tax amount.

For example, if a qualifying homeowner’s base year is 2011, and the property taxes assessed for 2011 were $5,000, if the property taxes assessed for 2014 are $7,000, and the homeowner’s income for 2014 is within the limitation, he/she will receive a check from Trenton for $2.000.

The income used to determine eligibility includes all income – both taxable and nontaxable.  It includes otherwise tax-exempt interest and the full amount of Social Security or Railroad Retirement benefits. 

Like the NJ state income tax income is categorized by source.  Losses in one category can be applied against income from the same category, but cannot be applied against income from another category.  A $5,000 capital loss from the sale of one stock can offset a $2,000 capital gain from the sale of another stock.  But the $3,000 in excess losses cannot be applied against $25,000 of gross Social Security benefits.  The PTR application would show $25,000 in Social Security income and 0 in capital gains.

Ever since 2010, in order to balance the state budget in the eleventh – or actually twelfth - hour, the legislature has reduced the income threshold for the current year, or the second year of comparison, from $80,000 (or $80,000 indexed for inflation) to $70,000.  If the applicable income for the year is under the $80,000 amount but over $70,000 there would be no check issued – but the qualifying homeowner would be able to create or maintain a base year tax amount.

The PTR application forms (PTR-1 for first-time applicants and PTR-2 for previously approved homeowners) – with a blue cover – are mailed out in mid to late February, and the initial deadline for filing the application is June 1st (or the next appropriate business day).  However each and every year the current sitting Governor, as proof of his “compassion” for seniors and the disabled, announces at the end of May that the filing deadline has been extended.  It has been extended a second time in the past – ultimately until October 15tt.  This has been going on for years. 

And it has been done again for 2014 PTR applications.  The page for “Property Tax Relief Programs”, and subsequent pages for the “Property Tax Reimbursement (Senior Freeze) Program”, on the website of the NJ Division of Taxation all state in bold print –

Filing deadline for 2014 Senior Freeze (PTR) Applications extended to October 15, 2015.”

And an official press release has been issued – click here.

It is good news for NJ senior and disabled homeowners – and those NJ tax preparers who have been holding their breaths because of PTR applications still to be done.

The word is still out on whether the income threshold will once again be dropped to $70,000.  We will not know that until the end of June or beginning of July.

If the idiots in Trenton (members of Congress are not the only idiots) are going to extend the filing deadline for the PTR applications till October 15th each and every year why don’t they just make the initial deadline October 15 and not June 1?!?

Why – because doing so does not allow the Governor to gain points with seniors and the disabled by extending the deadline at the last minute!

The current press release says –

We are extending the filing deadline for the Senior Freeze Program to ensure that every senior and disabled resident of New Jersey who is eligible for the program has an opportunity to apply.”

I also believe that one of these years, when tax preparers and homeowners are so used to the deadline extension that they assume it will be automatic, the DFBs in Trenton (clean version is Damned Fool Bureaucrats) in Trenton will surprise everyone and not extend the deadline – screwing senior and the disable out of tens of thousands of dollars in property tax relief so that the legislature will have more money to waste on pork and entitlements.

Am I being too cynical?  What person who has grown up in NJ – especially those who have grown up, as I did, in Hudson County – is not cynical when it comes to the actions and motives of politicians?


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