Tax refund programs unfunded due to COVID’s impact
BY ERIN ROLL
In a state where homeowners pay some of the highest property taxes in the nation, two programs that offer relief for low- and middle-income New Jerseyans have been put on hold as a result of the financial impact of COVID-19.
Homeowners will not be able to apply for the Homestead Benefit program this year, and the Senior Freeze program has itself been put on freeze.
On June 29, Gov. Phil Murphy presented a $7.6 billion spending plan, described as a “bare-bones” budget. The spending plan is intended to keep the state’s essential programs functioning.
“The unprecedented impact COVID-19 has had on the economy has forced the state to freeze funding for many worthy programs, including Senior Freeze, and prompted the extension of the budget deadline from June 30 to September 30. Therefore, funding for Senior Freeze reimbursements that typically occur during midsummer is unavailable at this time. Please check back here again in early October for possible updates,” according to the Division of Taxation.
The Senior Freeze program, begun in 1998, reimburses residents 65 and older or individuals with disabilities who meet the eligibility requirements for property tax or mobile home park site fee increases on their principal residence. The eligibility income limit for 2019 is $91,505 per couple.
All New Jersey taxpayers are eligible for the Homestead Benefit program if they make $75,000 or less and are under age 65. The income limit for homeowners age 65 or over is $150,000 or less. For most homeowners, the benefit is distributed to their municipality in the form of a credit, which reduces their property taxes.
As a result of the state’s spending freeze any credits “intended to be applied to the May 1 property tax bills can no longer be supported by the state at this time,” according to Division of Taxation officials.
“We have been working around the clock since this crisis hit to get a handle on the state’s continuously evolving finances,” said state Treasurer Elizabeth Maher Muoio. “The one certainty forecasters can agree on at this point is that uncertainty lies ahead, and we must prepare for that. Unfortunately, this means we must brace ourselves for more painful decisions on the road ahead.”
Homeowners are not eligible if they are exempt from paying property taxes on their principal residence, or made PILOT payments to their municipality. Vacation homes, second homes or property that the taxpayer owns and rents to someone else are also not eligible.
In March, New Jersey began releasing information on programs for which funding would have to be held back due to the financial impact of COVID-19.
The Homestead Benefit program accounts for $141.8 million of reserved balances, while the Senior Freeze program accounts for approximately $4.8 million.
As of May 1, New Jersey had lost approximately $3 billion in tax revenue that would have gone to the state’s next budget, according to estimates from the Treasury Department.
Check the treasury department’s website, www.state.nj.us/treasury, or call 888-238-1233 for information on when and if the programs will be re-funded.