Some 250,000 New Jersey residents could miss out on an income tax credit because of changes to the state’s property tax benefits under Stay NJ.
If the affected taxpayers don’t take action, it could add up to approximately $25 million of tax savings over two years gone. Forfeited. Lost forever. (Or added to the state’s coffers, depending on how you look at it.)
It all has to do with a controversial provision that brings the ANCHOR benefit year in line with the benefit years for Stay NJ and the Senior Freeze.
It gets a little wonky, so grab a cup of coffee or tea, or a beer, and let us explain.
For years, homeowners and renters who meet certain eligibility requirements would receive a $50 “Property Tax Credit.”
The majority of those who are eligible — people who are 65 and over or disabled and who earn under a certain limit — receive the credit when they file their New Jersey income tax return, Form NJ-1040. More than 600,000 people received the credit on their returns annually in tax years 2021, 2022 and 2023, the Treasury Department said.
Taxpayers who are not required to file an income tax return are still eligible for the credit. In recent years, they’d get it as an added $50 on their ANCHOR payment. Before that, it was an extra $50 on their Homestead Rebate.
This is where it gets confusing.
The last ANCHOR benefit tax year — the checks that went out last year — was for 2021. The off-kilter year is because Gov. Chris Christie twice delayed the Homestead Rebate, the precursor to ANCHOR, when the state’s budget was in trouble. It was delayed rather than cancelled outright, which would have been a politically unpopular move. When ANCHOR started, it kept the same delayed benefit year.
More than 241,000 residents, because they didn’t need to file a state tax return, received the $50 credit when they received their 2021 ANCHOR benefit, the Treasury Department said.
But because of changes in effect with the Stay NJ law — which created a combined application for ANCHOR, Senior Freeze and Stay NJ — the next ANCHOR benefit paid will be for the 2024 tax year. It was done to put all the state’s property tax benefits on the same year.
But it left taxpayers asking: What happens to the 2022 and 2023 benefit years? Officials said residents aren’t really missing years because payments will be made annually.
“As long as ANCHOR is funded, there will still be an annual payment,” said a report by the Stay NJ Task Force, which made recommendations on how to implement the program.
Indeed, the estates of deceased taxpayers will lose the benefit years. But heck. Dead people don’t vote.
MORE: Am I losing ANCHOR because of Stay NJ?
MORE: Property tax update: See the changes for ANCHOR, Senior Freeze and Stay NJ
And while few people want to spend a lot of time pondering the state’s future spending plans, property tax benefits are funded in each year’s budget. That means an annual payment is no guarantee. While the payments are on track for the budget being negotiated in Trenton for this fiscal year, the state does have to pull money from its reserves. Full funding of property tax benefits for future years isn’t a sure thing.
Back to the $50 credit.
For the 2024 benefit year, those who file a 2024 NJ-1040 will, if eligible, get the $50 with their refunds, just as they did in 2022 and 2023.
The issue is for people who do not file tax returns.
Those residents will get the $50 for the 2024 tax year when they receive their 2024 ANCHOR benefits later this year. But what of the payments they would have received for the 2022 and 2023 tax years? They won’t be paid with the 2022 and 2023 ANCHOR benefits because those no longer exist.
If you don’t take action, you won’t get your hundred bucks.
You must file both the 2022 and 2023 Form NJ-1040-HW, which can be downloaded from the state’s website, to get the money.
So, taxpayers — and based on previous tax years we’re talking about 250,000 of you — make sure you don’t miss this benefit.
Stories by Karin Price Mueller
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Karin Price Mueller may be reached at KPriceMueller@NJAdvanceMedia.com. Follow her on X at @KPMueller.
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