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), or you (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.

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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”

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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

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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.

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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)

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Property Tax Deduction/CreditTaxWise – When to fill out Wkt F# Question? Answer: What to do…

1 Is TP required to file NJ return (i.e. NJ-1040 line 28 > 20,000 for MFJ/HOH/QW (10,000 for Single/MFS)?

Yes: Fill out Worksheet F – go to Part 2No: Next Step

2 Did TP own principal residence on Oct 1, 2011?

Yes: Do NOT fill out Worksheet F even if filing NJ return; TP will get credit as part of Homestead Benefit – Done

No: Next Step3 Was TP under age 65 and not

Blind/Disabled on Dec 31, 2011?Yes: Do NOT fill out Worksheet F; TP

not eligible for credit – DoneNo: Next Step

4 Is TP e-filing federal return or filing NJ return for some other reason (e.g to get EIC or refund of withholding)?

Yes: Fill out Worksheet F – go to Part 2No: Fill out and file NJ-1040-H (paper

only) - Done

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Property Tax Deduction/CreditTaxWise – How to fill out Wkt F

Column A box What to fill inFirst box (Rent you paid in 2011) Rent paid for principal residence(s)

[Note: Rental unit must pay property taxes and unit must have own kithen and bath]

Second box (Property taxes you paid in 2011):

If filing PTR-1 (or PTR-2) for 2011, then use PTR base amount [Note: if using TW, then line 35a will need to be adjusted]

Otherwise use amount carried from Sch A (assuming Sch A, line 6, box 3 filled in using instructions on separate page)

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(If and only if required by procedure above)