OOPS - THEY DID IT AGAIN!

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As I expected, the New Jersey Department of the Treasury has just announced that the deadline for filing the Property Tax Reimbursement application (Form PTR-1 or PTR-2) has been extended to October 31, 2011.

Each year the initial filing deadline for the PTR form is June 1st. And each year at the end of May the deadline is extended, first to August and then to October. This year the Treasury Department has skipped the interim extension and gone directly to October.

October 31st is also the deadline for submitting an application for the New Jersey Homestead Benefit (formerly Rebate). The application forms for the “benefit” will be mailed out between June 4 and June 16 as follows –

Camden, Hudson, Hunterdon, Salem, Somerset = June 4
Bergen, Burlington, Cumberland, Warren = June 7
Gloucester, Mercer, Middlesex, Passaic = June 9
Cape May, Union = June 11
Atlantic, Essex, Monmouth, Sussex = June 14
Morris, Ocean = June 16

As was the case of the benefit distributed this year, qualified homeowners will receive a credit on their local 2012 property tax bill. Under the proposed budget the benefit will be provided to senior and disabled homeowners with a 2010 NJ Gross Income of $150,000 or less, and to all others with a 2010 NJ Gross Income of $75,000 or less.

Information on both benefit programs is available on the NJ Division of Taxation website.

TAFN

AN INTERESTING PTR SITUATION

Sorry I have been “away” for so long, but I am working on the GD extensions.

Here is an interesting situation.

The New Jersey Property Tax Reimbursement Program (aka Senior Freeze) reimburses senior and disabled homeowners for the annual increase in local real estate taxes.

As the NJDOT website explains –

“The amount of the reimbursement is the difference between the amount of property taxes that were due and paid for the "base year" (the first year that you met all the eligibility requirements) and the amount due and paid for the current year for which you are applying for the reimbursement, provided the amount paid for the current year was greater. You must meet all the eligibility requirements for the base year and for each succeeding year, up to and including the current year to qualify for the reimbursement.”

It seems that Berkeley Township (Toms River) did a complete re-evaluation of property taxes, which resulted in an actual reduction of real estate taxes assessed for calendar year 2010. For one client the taxes assessed and paid for 2010 was $600.00 less than the “base year” tax on the PTR-2. For another client the current taxes were over $100.00 less than the current "base year". So there will be no reimbursement for 2010.

If a homeowner fails to file a PTR-2 for a particular year, whether or not due to increases in income, it is my understanding that the old “base year” is lost and a new base year must be determined by filing a PTR-1 based on two consecutive years of income in a subsequent year.

So if the senior homeowners whose taxes went down do not file a 2010 Form PTR-2, and re-enter the program next year by filing a 2011 Form PTR-1 using 2010 and 2011 income for qualification, the base year for current and future PTR filings will be the real estate taxes assessed and paid in calendar year 2010. In these two cases the taxes assessed and paid for 2010 are lower than the “old” tax base that they had been using.

As of this writing I have advised the clients not to file a 2010 Form PTR-2, and will probably do the same thing next year. The original filing deadline, as it is every year, is June 1st. But, as happens every year, this deadline is extended and extended again until eventually October.

Do any of my fellow NJ tax preparers disagree with, or have anything to add to, this strategy? Please comment or email me at rdftaxpro@yahoo.com.

TAFN