There is positive tax news for some seniors this year. Contrary to public discussions this past summer, the approved budget that went into effect on October 1, 2020, fully funds the 2019 Senior Freeze Program. Also, the application deadline is extended from November 2, 2020, to December 31, 2020. Payments began being paid to eligible taxpayers on October 15 and will continue on a rolling basis as applications are received.
What is a Property Tax Freeze?
A property tax freeze prohibits increases to property taxes for eligible individuals. The New Jersey property tax freeze program, titled The Senior Freeze (Property Tax Reimbursement) Program, reimburses eligible New Jersey senior citizen residents for property taxes or mobile park site fees on one’s principal residence. The program does not actually freeze the property tax. Instead, it sets a base-year property tax value and then requires eligible individuals to file for reimbursement of any amounts over that base-year value. The base-year value is defined as the property tax in the first year you meet the freeze eligibility requirements. The reimbursement amount is calculated as the property tax paid in the current year less the property tax paid in the base year. The reimbursement check acts to effectively freeze the property tax bills.
Who is Eligible for the Property Tax Reimbursement?
The Senior Freeze is available to eligible New Jersey senior citizen residents. Eligibility must be met each year, even if you qualified the prior year. The State defined eligibility as meeting all the following requirements:
- One of the spouses who owns the home is age 65 or older on 12/31/2018, or is receiving Federal Social Security Disability benefits;
- One of the owners has resided in New Jersey as a renter or homeowner for the last 10 years (continuous) and has lived in the current home for the last 3 years;
- The full amount of the property taxes or mobile home site fees have been paid in the past;
- The home must be a primary residence to qualify, which does not include a vacation home, rental property or a home with more than 4 units; and
- The owners must meet the income limits, as described below.
Income eligibility is the most cumbersome criteria to meet. The annual income limit to qualify for the Senior Freeze is $91,505 for your 2019 tax year, which applies to either a single person or a married couple.
Income for eligibility includes salary income (W-2 and 1099 earnings), interest and dividends, business earnings, retirement income, social security benefits, disability benefits, and tax-exempt interest. Some of the more common exclusions from income are the Senior Freeze benefits, Homestead benefits, spousal life insurance, proceeds from a Special Needs Trust, and the capital gains on the sale of a home up to the exclusion of $250,000 if you’re single, and $500,000 if you’re married and filing jointly.
How to Apply for the Senior Freeze Property Tax Reimbursement
You must file a completed Application PTR-1 and Homeowner’s Verification of 2018 and 2019 Property Taxes form before December 31, 2020 if you are:
- A first-time filer, or
- An individual who filed an application in the previous year that was denied because you did not meet all the eligibility requirements
You can find these forms here on the State of New Jersey website.
If you previously filed the PTR-1 Form and met the eligibility requirements, you must complete a Form PTR-2. The PTR-2 Form is a personalized application mailed to you from the State if you filed an application and met all the eligibility requirements for reimbursement the previous year. If you have not received your personalized application, call the Property Tax Reimbursement Hotline at 1-800-882-6597.
If you have already submitted the appropriate documents, you can check the status of your New Jersey Senior Freeze Property Tax Reimbursement online.
The Senior Freeze rules, including eligibility, are subject to change based on the annual State budget. We will continue to monitor the situation throughout the year. If you think you meet the eligibility requirements, we recommend that you complete the application process as soon as possible.