Provides gross income tax credits for portion of homeowners' association payments used in fund infrastructure improvements within common interest communities.

A4474

ASSEMBLY, No. 4474

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 24, 2026

Sponsored by:

Assemblyman� ALEX SAUICKIE

District 12 (Burlington, Middlesex, Monmouth and Ocean)

SYNOPSIS

���� Provides gross income tax credits for portion of
homeowners� association payments used to fund infrastructure improvements
within common interest communities.�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
providing a gross income tax credit for certain
homeowners� association payments, and supplementing Title 54A of the New Jersey
Statutes.

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

���� 1.��� a.� A resident taxpayer
who is a member of a homeowners� association and maintains a primary residence
within a common interest community shall be allowed a credit against the tax
imposed pursuant to the �New Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et
seq., equal to the amount of homeowners� association assessments constituting
infrastructure improvements paid by the taxpayer during the taxable year.� If
two or more resident taxpayers qualify for a tax credit for the same primary
residence, the amount of the credit allowed shall be allocated in proportion to
each resident taxpayer�s share of homeowners� association assessments paid in
the taxable year.

���� b.��� When filing a return
that includes a claim for the homeowners� association infrastructure
improvement tax credit allowed pursuant to this section, a taxpayer shall
submit a copy of the certification issued to the taxpayer by their homeowners�
association pursuant to subsection c. of this section calculating the amount of
homeowners� association assessments constituting infrastructure improvements
that were paid by the taxpayer during the taxable year for which the credit is
claimed.

���� c.���� A homeowners�
association shall, upon written application by a member of the association and
on such forms as may be required by the association, issue written
certification to the member calculating the amount of the homeowners�
association assessments constituting infrastructure improvements that were paid
by the member during the taxable year for which the credit is claimed. �The
homeowners� association shall issue the certification no later than 30 days
following the date of receipt of a completed application.

���� d.��� A resident taxpayer who
is not subject to tax in accordance with N.J.S.54A:2-4 for a taxable year may
apply for the homeowners� association infrastructure improvement tax credit
using an application to be made available by the director.� The due date for a
homeowners� association infrastructure improvement tax credit shall coincide
with the due date for annual gross income tax returns.

���� e.���� If the credit allowed
pursuant to this section, together with any other payments, credits,
deductions, and adjustments allowed by law, reduces a qualified taxpayer�s tax
liability otherwise due under N.J.S.54A:1-1 et seq. to zero, the amount of the
credit remaining shall be paid to the taxpayer as a refund of an overpayment in
accordance with N.J.S.54A:9-7; provided, however, that subsection (f) of that
section, concerning the allowance of interest, shall not apply.� �

���� f.���� A taxpayer shall be
eligible for the homeowners� association infrastructure improvement tax credit
regardless of whether the primary residence is subject to property tax or an
agreement for payments in lieu of taxes.

���� g.��� For purposes of this
section:

���� �Common interest community� means:

���� (1)�� property subject to the
"Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.) or the
"Horizontal Property Act," P.L.1963, c.168 (C.46:8A-1 et seq.);

���� (2)�� a housing corporation or
association, commonly known as a cooperative, which entitles the holder of a
share or membership interest thereof to possess and occupy for dwelling
purposes a house, apartment, manufactured or mobile home 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; or

���� (3)�� real estate with respect
to which a person, by virtue of his ownership of a unit, is obligated to pay
for real estate taxes, insurance premiums, maintenance or improvement of other
real estate described in the instrument, however denominated, which creates the
common interest community.� Ownership of a unit does not include holding a
leasehold interest of less than 20 years in a unit, including renewal options.

���� �Homeowners� association� or
�association� means a homeowners� association as defined in section 528(c)(1)
of the federal Internal Revenue Code, 26 U.S.C. s.528, that is located in the
State, but excluding a timeshare association

���� �Homeowners� association
assessment� means a regular or one-time mandatory financial assessment that is
paid to a homeowners� association for the taxpayer�s primary residence and
which arises from: (1) the taxpayer�s mandatory and automatic membership in the
homeowners� association; or (2) a mandatory obligation imposed by a homeowners�
association on unit owners who pay regularly occurring assessments.

���� �Homeowners� association
assessments constituting infrastructure improvements� means 18 percent of the
total homeowners� association assessments paid by a taxpayer during a taxable
year.

���� 2.��� This act shall take
effect immediately and shall apply to taxable years beginning on or after the
January 1 of the year next following the date of enactment.

STATEMENT

���� This bill would provide a
refundable gross income tax credit to resident taxpayers for a portion of
homeowners� association assessments that are paid by taxpayers for primary
residences within any common interest community, and which are used by the
homeowners� association to support infrastructure improvements within the
community.� A taxpayer would be eligible for the credit regardless of whether
the primary residence is subject to property taxes or an agreement for payments
in lieu of taxes (�PILOT payments�).

���� Specifically, the homeowners�
association infrastructure improvement tax credit would equal the amount of
�homeowners� association assessments constituting infrastructure improvements�
paid by the taxpayer during the taxable year.� The bill defines �homeowners�
association assessments constituting infrastructure improvements� to include 18
percent of the total homeowners� association assessments paid by a taxpayer
during a taxable year.

���� When filing a tax return that
includes a claim for the credit, a taxpayer would be required to submit a copy
of a certification, issued upon application by the taxpayer to their
homeowners� association, that calculates the amount of the homeowners�
association assessments constituting infrastructure improvements paid by the taxpayer
during the taxable year for which the credit is claimed.