New Jersey offers eligible residents either a Property Tax Deduction or a Property Tax Credit based on property taxes paid on their principal residence. The program will generally calculate both benefits and apply the option that provides the greater tax advantage.
Program Entry
New Jersey Return → Credits → Property Tax Credit/Deduction
What Is the Difference Between the Property Tax Deduction and Property Tax Credit?
Property Tax Deduction
The Property Tax Deduction reduces your New Jersey taxable income based on the amount of property taxes paid on your principal residence.
Because the deduction reduces taxable income, the actual tax savings will depend on your income and tax bracket.
Property Tax Credit
The Property Tax Credit directly reduces the amount of New Jersey tax owed.
If the Property Tax Credit provides a greater benefit than the deduction, the program will generally apply the credit instead of the deduction.
Did You Meet Property Tax Eligibility Requirements?
Select Yes if you meet New Jersey's eligibility requirements for claiming a property tax benefit.
Generally, you must:
- Have owned or rented your principal residence in New Jersey during the tax year; and
- Have paid property taxes directly, or rent that includes property taxes.
Select No if you do not qualify.
Enter Property Taxes Paid and/or 18% of Net Rent Paid While a Resident of NJ
Homeowners
Enter the amount of property taxes paid on your principal New Jersey residence during the tax year.
If you owned the property with other individuals, enter only your share of the property taxes paid.
Renters
New Jersey treats 18% of net rent paid as property taxes for purposes of the Property Tax Credit or Deduction.
Enter the portion of rent that qualifies based on New Jersey requirements.
Part-Year Residents
Enter only the amount attributable to the portion of the year you were a New Jersey resident.
Type of Rent or Taxes Paid for Property Tax Deduction
Select the option that best describes the type of property taxes or rent paid during the year.
Examples may include:
- Homeowner property taxes
- Rent paid on a principal residence
- Other qualifying property tax situations
Will You Be Filing Form NJ-1040-HW to Claim Your Property Tax Credit?
Form NJ-1040-HW
Form NJ-1040-HW, Property Tax Credit/Wounded Warrior Caregivers Credit Application, is used by eligible taxpayers to claim certain New Jersey property tax benefits and the Wounded Warrior Caregivers Credit.
If you plan to file Form NJ-1040-HW, select Yes.
If not, select No.
Property Tax Reimbursement Applicants
If you filed:
- Form PTR-1, enter the property taxes (or 18% of site fees) reported on that return; or
- Form PTR-2, enter the base year property taxes (or 18% of site fees) reported on that return.
These amounts are used to determine the appropriate property tax benefit.
Owner's Percentage
If there were multiple owners of the property, enter your ownership percentage as a whole number.
Examples:
- 100% ownership = 100
- 50% ownership = 50
- 25% ownership = 25
Do not enter decimals.
Unit Percentage
If the property contains multiple units, enter the percentage attributable to your unit.
Examples:
- One unit in a two-unit property = 50
- Entire property occupied by taxpayer = 100
Do not enter decimals.
Special Rules for Seniors, Blind, or Disabled Taxpayers
If you (or your spouse if filing jointly) were:
- Age 65 or older;
- Blind; or
- Disabled
on the last day of the tax year, additional New Jersey property tax relief programs may be available.
Answer the applicable questions in the interview to determine eligibility.
How Does This Affect My Return?
The Property Tax Credit or Deduction may:
- Reduce New Jersey taxable income.
- Reduce New Jersey tax liability.
- Increase your New Jersey refund.
- Lower the amount of tax owed.
The program will generally calculate the available benefit based on the information entered and apply the option that provides the greater tax advantage.