New Jersey Homestead Rebate Tax Information

By Carrie Ferland
A young couple meeting with a tax professional

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The New Jersey Homestead Tax Rebate is a tax credit for residents who own a home within the state. Eligible homeowners can receive a rebate of up to 10 percent of the amount they paid in property taxes for the previous year, calculated by determining a homeowner's income, filing status and property taxes paid. Residents must fall within a certain income level and meet certain criteria to qualify, and the limits are set higher to allow more senior and disabled residents to collect the rebate.

Eligibility

Eligible homeowners must own a permanent residence within the state of New Jersey and utilize the home as a primary residency on or before Oct. 1 of the previous year. Homeowners who rent out properties owned in New Jersey do not qualify for the Homestead Tax Rebate. Homeowners must have owed and paid local property taxes in full the year previous to claiming the rebate. Eligible homeowners with more than one residence within New Jersey can claim the Homestead Tax Rebate for only one property.

Income Requirements

New Jersey sets a maximum income limit for the Homestead Tax Rebate. To qualify, residents must have a combined yearly income that meets or falls below the income limits. If you are married or share ownership of your residential property with another individual, your combined income must meet the limitations to qualify. New Jersey adjusts the income limit every few years to adjust for the cost of living. To find the current limits for the Homestead Tax Rebate, visit the New Jersey Division of Taxation website.

Preclusions

Homeowners who are “completely exempt” from property tax liability for their primary residence -- including disabled veterans and their qualifying spouse or domestic same-sex partner -- do not satisfy the property tax requirement and are thus ineligible for the Homestead Tax Rebate. Residents who participated in the New Jersey Payments-in-Lieu-of-Tax (P.I.L.O.T.) program for the year before the application are also ineligible for the rebate.

Leased Residences

Before 2009, individuals who rented their homes were eligible for the Homestead Tax Rebate if they met all other residency and income requirements. New Jersey revised the rebate program in 2009 to preclude tenants from eligibility, even if they pay the property taxes on their rented home per the terms of their lease. Landlords are still ineligible for the Homestead Tax Rebate unless they reside full time within the home that they are leasing.

Rebate Payments

New Jersey pays the Homestead Tax Rebate in quarterly installments. Rather than issue refunds via check or direct deposit, the state applies the rebate directly to each eligible homeowner's property tax bill. The first quarterly payment begins in May of the year after the application.

Application

Homeowners cannot request an application; rather, the New Jersey Division of Taxation sends applications to qualifying homeowners based on residency and property tax histories. If you determine you are eligible, but you did not receive an application by the deadline (typically, on or around May 1), you can contact the Division of Taxation and request a review of your eligibility status.

About the Author

Carrie Ferland is a practicing civil litigation defense attorney in the Philadelphia Area. As an author, her work has been featured in various legal publications for over 10 years. Ferland is a 2000 graduate of Pennsylvania State University and completed her Juris Doctorate and Master of Business Administration with the Dickinson School of Law. She is currently pursuing a Doctor of Philosophy in English.