This bill amends current New Jersey tax law to allow taxpayers to deduct the total amount of State property taxes paid on their principal residence from their gross income tax obligation, removing the previous cap of $15,000 on such deductions. Specifically, it eliminates the maximum allowable deductions for both property taxes and rent constituting property taxes, which was previously defined as 18 percent of rent. This change means that taxpayers can now deduct the full amount of property taxes or rent constituting property taxes that they have paid in a calendar year.

The bill also clarifies the eligibility criteria for deductions related to property taxes and rent for taxpayers who may occupy multiple homesteads or share ownership with others. It maintains provisions for joint ownership and separate filings for married couples, ensuring that deductions are proportionate to ownership shares. The bill is set to take effect immediately and will apply to taxable years beginning on or after January 1, 2022.

Statutes affected:
Introduced: 54A:3A-17, 54A:3A-18, 54A:3A-19