Requires application for homestead property tax reimbursement to be filed with NJ gross income tax return.

A1124

ASSEMBLY, No. 1124

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman JOE DANIELSEN

District 17 (Middlesex and Somerset)

Assemblywoman VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

SYNOPSIS

���� Requires application for homestead property tax
reimbursement to be filed with NJ gross income tax return.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
concerning the homestead property tax reimbursement
application process and amending P.L.1997, c.348.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� Section 1 of P.L.1997,
c.348 (C.54:4-8.67) is amended to read as follows:

���� 1.��� As used in this act:

���� "Base year" means,
in the case of a person who is an eligible claimant on or before December 31,
1997, the tax year 1997; and in the case of a person who first becomes an
eligible claimant after December 31, 1997, the tax year in which the person
first becomes an eligible claimant.� In the case of an eligible claimant who
subsequently moves from the homestead for which the initial eligibility was
established, the base year shall be the first full tax year during which the
person resides in the new homestead. Provided however, a base year for an
eligible claimant after such a move shall not apply to tax years commencing
prior to January 1, 2009.

���� "Commissioner" means
the Commissioner of Community Affairs.

����
[
"Director" means the
Director of the Division of Taxation.
]

���� "Condominium" means
the form of real property ownership provided for under the "Condominium
Act," P.L.1969, c.257 (C.46:8B-1 et seq.).

���� "Cooperative" means
a housing corporation or association which entitles the holder of a share or
membership interest thereof to possess and occupy for dwelling purposes a
house, apartment or other unit of housing owned or leased by the corporation or
association, or to lease or purchase a unit of housing constructed or to be
constructed by the corporation or association.

����
�Director� means the
Director of the Division of Taxation.

���� "Disabled person"
means an individual receiving monetary payments pursuant to Title II of the
federal Social Security Act (42 U.S.C. s.401 et seq.) on December 31, 1998, or
on December 31 in all or any part of the year for which a homestead property
tax reimbursement under this act is claimed.

���� "Dwelling house"
means any residential property assessed as real property which consists of not
more than four units, of which not more than one may be used for commercial
purposes, but shall not include a unit in a condominium, cooperative, horizontal
property regime or mutual housing corporation.

���� "Eligible claimant"
means a person who:

���� is 65 or more years of age, or
who is a disabled person;

���� is an owner of a homestead, or
the lessee of a site in a mobile home park on which site the applicant owns a
manufactured or mobile home;

���� has an annual income of less
than $17,918 in tax year 1998, less than $18,151 in tax year 1999, or less than
$37,174 in tax year 200 0, if single, or, if married, whose annual income
combined with that of the spouse is less than $21,970 in tax year 1998, less
than $22,256 in tax year 1999, or less than $45,582 in tax year 2000, which
income eligibility limits for single and married persons shall be subject to
adjustments in tax years 2001 through 2006 pursuant to section 9 of P.L.1997,
c.348 (C.54:4-8.68);

���� has an annual income of
$60,000 or less in tax year 2007, $70,000 or less in tax year 2008, or $80,000
or less in tax year 2009, if single or married, which income eligibility limits
shall be subject to adjustments in
[
subsequent
]
tax years
2010
through 2021
pursuant to section 9 of P.L.1997, c.348 (C.54:4-8.68);

����
for tax years beginning on
or after January 1, 2022, has an annual gross income of $92,969 or less in tax
year 2020, which gross income eligibility limit shall be subject to adjustments
in subsequent tax years pursuant to section 9 of P.L.1997, c.348 (C.54:4-8.68);

���� as a renter or homeowner, has
made a long-term contribution to the fabric, social structure and finances of
one or more communities in this State, as demonstrated through the payment of
property taxes directly, or through rent, on any homestead or rental unit used
as a principal residence in this State for at least 10 consecutive years at
least three of which as owner of the homestead for which a homestead property
tax reimbursement is sought prior to the date that an initial application for a
homestead property tax reimbursement is filed.� A person who has been an
eligible claimant for a previous tax year shall qualify as an eligible claimant
beginning the second full tax year following a move to another homestead in New
Jersey, despite not meeting the three-year minimum residency and ownership
requirement required for initial claimants under this paragraph; provided that
the person satisfies the income eligibility limits for the tax year.� Provided
however, eligibility beginning in a second full tax year after such a move
shall not apply to tax years commencing prior to January 1, 2010.

���� �
Gross income� means all
New Jersey gross income required to be reported pursuant to the �New Jersey
Gross Income Tax Act,� N.J.S.54A:1-1 et seq., other than income excludable from
the gross income tax return, but before reduction thereof by any applicable
exemptions, deductions, and credits received during the taxable year by the
owner or residential shareholder in, or lessee, of, a homestead.

���� "Homestead" means:

���� a dwelling house and the land
on which that dwelling house is located which constitutes the place of the
eligible claimant's domicile and is owned and used by the eligible claimant as
the eligible claimant's principal residence;

���� a site in a mobile home park
equipped for the installation of manufactured or mobile homes, where these
sites are under common ownership and control for the purpose of leasing each
site to the owner of a manufactured or mobile home for the installation thereof
and such site is used by the eligible claimant as the eligible claimant's
principal residence;

���� a dwelling house situated on
land owned by a person other than the eligible claimant which constitutes the
place of the eligible claimant's domicile and is owned and used by the eligible
claimant as the eligible claimant's principal residence;

���� a condominium unit or a unit
in a horizontal property regime or a continuing care retirement community which
constitutes the place of the eligible claimant's domicile and is owned and used
by the eligible claimant as the eligible claimant's principal residence.

���� In addition to the generally
accepted meaning of "owned" or "ownership," a homestead
shall be deemed to be owned by a person if that person is a tenant for life or
a tenant under a lease for 99 years or more, is entitled to and actually takes
possession of the homestead under an executory contract for the sale thereof or
under an agreement with a lending institution which holds title as security for
a loan, or is a resident of a continuing care retirement community pursuant to
a contract for continuing care for the life of that person which requires the
resident to bear, separately from any other charges, the proportionate share of
property taxes attributable to the unit that the resident occupies;

���� a unit in a cooperative or
mutual housing corporation which constitutes the place of domicile of a
residential shareholder or lessee therein, or of a lessee or shareholder who is
not a residential shareholder therein, which is used by the eligible claimant
as the eligible claimant's principal residence.

���� "Homestead property tax
reimbursement" means payment of the difference between the amount of
property tax or site fee constituting property tax due and paid in any year on
any homestead, exclusive of improvements not included in the assessment on the
real property for the base year, and the amount of property tax or site fee
constituting property tax due and paid in the base year, when the amount paid
in the base year is the lower amount; but such calculations shall be reduced by
any current year property tax reductions or reductions in site fees
constituting property taxes resulting from judgments entered by county boards
of taxation or the State Tax Court.

���� "Horizontal property
regime" means the form of real property ownership provided for under the
"Horizontal Property Act," P.L.1963, c.168 (C.46:8A-1 et seq.).

���� "Manufactured home"
or "mobile home" means a unit of housing which:

���� (1)�� Consists of one or more
transportable sections which are substantially constructed off site and, if
more than one section, are joined together on site;�

���� (2)�� Is built on a permanent
chassis;

���� (3)�� Is designed to be used,
when connected to utilities, as a dwelling on a permanent or nonpermanent
foundation; and

���� (4)�� Is manufactured in
accordance with the standards promulgated for a manufactured home by the
Secretary of the United States Department of Housing and Urban Development
pursuant to the "National Manufactured Housing Construction and Safety
Standards Act of 1974," Pub.L.93-383 (42 U.S.C. s.5401 et seq.) and the
standards promulgated for a manufactured or mobile home by the commissioner
pursuant to the "State Uniform Construction Code Act," P.L.1975,
c.217 (C.52:27D-119 et seq.).

����
�Income� means as
determined pursuant to P.L.1975, c.194 (C.30:4D-20 et seq.)
.

���� "Mobile home park"
means a parcel of land, or two or more parcels of land, containing no fewer
than 10 sites equipped for the installation of manufactured or mobile homes,
where these sites are under common ownership and control for the purpose of
leasing each site to the owner of a manufactured or mobile home for the
installation thereof, and where the owner or owners provide services, which are
provided by the municipality in which the park is located for property owners
outside the park, which services may include but shall not be limited to:

���� (1)�� The construction and
maintenance of streets;

���� (2)�� Lighting of streets and
other common areas;

���� (3)�� Garbage removal;

���� (4)�� Snow removal; and

���� (5)�� Provisions for the
drainage of surface water from home sites and common areas.

���� "Mutual housing
corporation" means a corporation not-for-profit, incorporated under the
laws of this State on a mutual or cooperative basis within the scope of section
607 of the Langham Act (National Defense Housing), Pub.L.849, (42 U.S.C. s.1521
et seq.), as amended, which acquired a National Defense Housing Project
pursuant to that act.

����
[
"Income" means income
as determined pursuant to P.L.1975, c.194 (C.30:4D-20 et seq.).
]

���� "Principal
residence" means a homestead actually and continually occupied by an
eligible claimant as his or her permanent residence, as distinguished from a
vacation home, property owned and rented or offered for rent by the claimant,
and other secondary real property holdings.

���� "Property tax" means
the general property tax due and paid as set forth in this section, and shall
include the amount of property tax credit as defined in section 1 of P.L.2018,
c.11 (C.54:4-66.6), on a homestead, but does not include special assessments
and interest and penalties for delinquent taxes.� For the sole purpose of
qualifying for a benefit under P.L.1997, c.348 (C.54:4-8.67 et seq.), property
taxes paid by June 1 of the year following the year for which the benefit is
claimed will be deemed to be timely paid.

���� "Site fee constituting
property tax" means 18 percent of the annual site fee paid or payable to
the owner of a mobile home park.

���� "Tax year" means the
calendar year in which a homestead is assessed and the property tax is levied
thereon and it means the calendar year in which income is received or accrued.

(cf: P.L.2018, c.11, s.11)

���� 2.� Section 9 of P.L.1997,
c.348 (C.54:4-8.68) is amended to read as follows:

���� 9.��� The
gross
income
eligibility limits provided in the definition of "eligible claimant"
under section 1 of P.L.1997, c.348 (C.54:4-8.67) shall increase by the amount
of the maximum Social Security benefit cost of living increase for that year
for single and married persons, respectively.� The director shall adopt new
gross

income limits annually by notice or regulation.

(cf:� P.L.1997, c.348, s.9)

���� 3.� Section 3 of P.L.1997,
c.348 (C.54:4-8.70) is amended to read as follows:

���� 3.��� An application for a
homestead property tax reimbursement hereunder shall be filed with the director
annually beginning
[
April
1 and ending October 31
]

January 1 and ending April 15
of the year following the year for which
the claim is being made
[
and
]
.�
The
application shall be submitted (1) as part of the eligible claimant�s gross
income tax return filed pursuant to the �New Jersey Gross Income Tax Act,�
N.J.S.54A:1-1 et seq., or (2) on any other form, in any manner and at any time
prior to any date the director shall prescribe if (a) the claimant is not
required to file a gross income tax return or (b) the eligible claimant has
filed an application for extension of time to file the claimant�s gross income
tax return.� The application
shall reflect the prerequisites for a
homestead property tax reimbursement on December 31 of the tax year for which
the claim is being made; provided, however, that the director may, by rule,
designate a later date as the date by which the application shall be filed or
waive the requirement for filing an annual application for any year or years
subject to any limitations and conditions the director may deem appropriate.�
The application shall be on a form prescribed by the director and provided for
the use of applicants hereunder.� Each applicant making a claim for a homestead
property tax reimbursement under this act shall provide, if required by the
director, to the director a copy of his or her current year property tax bill
or current year site fee bill on the homestead constituting that person's
principal residence and a copy of his or her property tax bill for the base
year or site fee bill for the base year on the same homestead, or other
equivalent proof as permitted by the director.�
The director may require an
eligible claimant to submit such additional information about the claimant�s
age, annual gross income, and property address as well as any other information
deemed necessary by the director in order to approve or disapprove the eligible
claimant�s application.� The director may inspect all records in the offices of
the tax collector and tax assessor of a municipality with respect to
applications and claims for a homestead property reimbursement.

���� It shall be the duty of every
eligible claimant to inform the director of any change in his or her status or
homestead which may affect his or her right to continuance of the homestead
property tax reimbursement.

���� If an eligible claimant
receives an additional homestead property tax reimbursement to which the
claimant was not entitled or greater than the reimbursement to which the
claimant was entitled, the director shall permit the claimant to enter into an
installment payment agreement for a reasonable period of time that will enable
the claimant to completely satisfy the amount of the reimbursement paid to
which the claimant was not entitled.� If the claimant does not enter into an
installment payment agreement, the director may, in addition to all other
available legal remedies, offset such amount against a gross income tax refund
or amount due pursuant to P.L.1990, c.61.

(cf: P.L.2017, c.370)

���� 4. This act shall take effect
immediately and shall be operative as of January 1, 2023.

STATEMENT

���� This bill amends current law
to make it easier for eligible claimants to file an application for the
homestead property tax reimbursement program.� This program is more commonly
known as the �senior freeze.�

���� In pertinent part, P.L.1997,
c.348 limited eligibility for the homestead property tax reimbursement to
senior citizens and disabled persons who were eligible for the program of
pharmaceutical assistance to the aged and disabled (PAAD).� A claimant�s eligibility
to receive a homestead property tax reimbursement was based, in part, on
whether their income was within the limit used to determine eligibility for
PAAD.� This method of calculating income requires a claimant to file a separate
application for the homestead property tax reimbursement which reports all
source of income, including income they do not report on their New Jersey gross
income tax return.� This application process is often cumbersome and confusing
for senior freeze applicants.�

���� This bill provides that an
applicant�s gross income, as reported pursuant to the �New Jersey Gross Income
Tax Act,� would be used to determine their eligibility for a homestead property
tax reimbursement.� Using gross income to determine a claimant�s eligibility
for a homestead property tax reimbursement is intended to make the homestead
property tax reimbursement process less stressful because claimants will not
have to file a separate application to report their income and the Division of
Taxation will be able to determine a claimant�s eligibility by reviewing their
New Jersey gross income tax return.

���� The bill also requires an
eligible claimant to file a property tax reimbursement application with their
New Jersey gross income tax return.� The bill permits the Director of the
Division of Taxation to establish alternate methods of submitting a property
tax reimbursement application if an eligible claimant is not required to file a
gross income tax return or if an eligible claimant is has filed an extension to
file their gross income tax return.� The bill also allows the Director of the
Division of Taxation to require the submittal of additional information
necessary to determine a claimant�s eligibility to receive a homestead property
tax reimbursement.�

���� This bill takes effect
immediately but would not be operative until January 1, 2023 in order provide
the Division of Taxation time to update its processes for administering the
homestead property tax reimbursement program.