New Jersey Modifies Stay New Jersey Property Tax Credit for 2026
On November 1, 2024, Governor Phil Murphy signed into law legislation that introduces significant changes to the Stay New Jersey Property Tax Credit program, which is set to take effect in 2026. The new law brings adjustments aimed at refining eligibility and benefit amounts for New Jersey residents, particularly senior citizens and other qualifying individuals. Here’s an overview of the major updates to this program.
Originally designed to offer property tax relief to eligible New Jersey residents, the Stay New Jersey Property Tax Credit was expected to provide a credit equal to 50% of the property taxes paid on a primary residence. The credit was scheduled to begin in 2026 and was intended to assist taxpayers with a gross income of under $500,000. However, tax benefits from other programs such as the Anchor Benefit and the Senior Freeze would reduce the amount of the Stay New Jersey credit.
Key Amendments to the Program
The recent legislation introduces two significant changes to the Stay New Jersey Property Tax Credit:
Benefit Cap of $6,500
The new law imposes a $6,500 cap on the total benefits a claimant may receive. This cap applies not only to the Stay New Jersey Property Tax Credit but also to the Anchor Benefit and the Senior Freeze program. This means that combined benefits from all three programs will be limited to a maximum of $6,500.
Revised Gross Income Calculation
The method for determining eligibility has been updated. From now on, a claimant’s gross income will be calculated using their New Jersey gross income before any deductions or exclusions. Additionally, certain income sources that were previously excluded are now included in the calculation. These include:
- Payments received under the federal Social Security Act
- Pension and annuity income
- Exempt interest income
- Other retirement income
- Distributions from a Roth IRA
This broader definition of income may impact eligibility for those who previously qualified based on deductions and exclusions.
New Combined Application Process
Another significant change is the introduction of a combined application for the Stay New Jersey Property Tax Credit, Anchor Benefit, and Senior Freeze. The application will be streamlined and follow the format of the existing Senior Freeze Application, making the process simpler for claimants to apply for all three benefits at once.
What This Means for New Jersey Residents
The modifications to the Stay New Jersey Property Tax Credit program are aimed at providing more clarity and consistency for New Jersey taxpayers, especially those in their retirement years. While the $6,500 cap may reduce the total benefits for some, the new income calculation method ensures a more comprehensive evaluation of eligibility, potentially including more income sources than before.
As the program is slated to begin in 2026, eligible residents must stay informed about the application process and any further updates. If you’re a New Jersey resident planning to take advantage of the Stay New Jersey Property Tax Credit, make sure to consult with a tax professional to fully understand how these changes may impact you.
The changes to the Stay New Jersey Property Tax Credit reflect the state’s ongoing efforts to ensure fair property tax relief for eligible residents while making the application process more streamlined. Whether you’re a senior citizen, retiree, or another eligible resident, staying informed about the new guidelines will help you maximize the benefits of the program starting in 2026.
For more information, please contact Martin D. Hauptman at (973) 243-7912 or via email at mhauptman@mblawfirm.com