Home NJ Income Tax Property Tax Deduction/Credit for Homeowners and Tenants

NJ Income Tax Property Tax Deduction/Credit for Homeowners and Tenants

Homeowners and tenants who pay property taxes, on a primary residence in New Jersey, either directly or through rent, may qualify for either a deduction or a refundable credit when filing an Income Tax return.

The property tax deduction reduces your taxable income. You can deduct your property taxes paid or $15,000, whichever is less. For Tax Years 2017 and earlier, the maximum deduction was $10,000. For tenants, 18% of rent paid during the year is considered property taxes paid. Keep in mind that the amount of property taxes paid that you can deduct depends on a number of factors, such as the number of owners or units. Visit Determining the Amount of Property Taxes Paid for more information.

The property tax credit reduces your tax due because it is subtracted directly from your tax liability. The benefit is a refundable credit of $50.

You can claim only one of these benefits on your tax return. If you qualify (see Eligibility Requirements), follow the instructions in the New Jersey Resident Income Tax return (Form NJ-1040 ) to determine if the credit or deduction will give you the greater benefit.

We audit returns to make sure homeowners and tenants meet the eligibility requirements.

Residents Not Required to File a Return

Age 65 or Older and/or Disabled. If you (or your spouse/civil union partner if filing jointly) were 65 or older or blind or disabled on December 31 of the tax year and your income was below the filing threshold amount for your filing status, and you satisfy the eligibility requirements, apply for the credit as follows:

Homeowners who are eligible and file Homestead Benefit applications will automatically receive their property tax credits with their Homestead Benefits.

Tenants and those homeowners who are not eligible for the Homestead Benefit because on October 1, 2019, they were not homeowners, may complete Form NJ-1040-HW to claim the property tax credit or they may claim the credit on Form NJ-1040. Do not file both Form NJ-1040 and Form NJ-1040-HW.

Under Age 65 and Not Disabled. If you are not required to file a return because your income was below the filing threshold amount for your filing status, you are not eligible for a property tax credit.

For more information on the property tax deduction or credit, see the New Jersey Resident Income Tax Return instructions .