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EAlert: NJ Property Tax as Contributions

Effective January 1, 2018, the Federal Tax Cuts and Jobs Act placed a limit on the total itemized deductions that a taxpayer can now claim on all nonbusiness state and local income taxes, and property taxes of up to $10,000 ($5,000 for a married taxpayer filing a separate return).  Due to this reduction in the Federal tax deduction applicable to taxpayers who still itemize, the State of New Jersey decided to pass legislation permitting localities to establish charitable funds that will accept donations.  They will provide homeowners with a property tax credit equal to 90% of the contributions to the charitable fund.  The donation made on behalf of real property will be entitled to a credit against the next property tax payment.

You should also be aware that the federal government already announced that they would be challenging the treatment of the real estate taxes as contributions.
 
For further information about these tax changes and how they will affect you, contact Jeff Cohen at jcohen@grassicpas.com.
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