10227: NJ - Homestead Credit / Deduction

The New Jersey program is able to calculate the more beneficial of the property tax credit or deduction, however, different entries are required depending on whether the taxpayer owns, rents, or has a combination of owning/renting throughout the year.

If the taxpayer owns the home, do the following:

• On the federal A screen:
  • Select NJ in the ST drop list.
  • Enter all property taxes in the first line 5b Real Estate.
  • In the second data entry field for line 5b Taxes that qualify for State Property Tax Credit. enter the amount of property taxes paid by the taxpayer in 20YY on the home that was their principal residence as of October 1, 20YY.
• On NJ screen 2, enter the Block, Lot and Qualifier of eligible property.
  • You can obtain this information from your property tax bill or from your local tax assessor. 
    
• The most advantageous of the deduction or credit is calculated on NJ WK_H and carries to the NJ 1040.

If the taxpayer rents, do the following: 

• On NJ screen 2, enter the total rent paid by the taxpayer and spouse during the year on the principal residence.
• The most advantageous of the deduction or credit is calculated on NJ WK_H and carries to the NJ 1040.

If the taxpayer owns and rents, or owns/rents multiple residences, throughout the year, do the following: 

• On NJ screen 2, enter the Block, Lot and Qualifier of the property that was owned and occupied as the principal residence on December 31, provided property taxes were paid on that home. If the taxpayer was not a homeowner on December 31, enter the information for the last home that was owned and occupied during the year.
  
• Complete the NJ G1 screen showing all properties owned and/or rented during the year.
• The NJ WK_G will show the entries in view mode.
• The most advantageous of the deduction or credit is calculated on NJ WK_H and carries to the NJ 1040.

See the NJ 1040 Instructions for details and full eligibility requirements.