(TRENTON) -- An Assembly panel on Monday advanced multiple measures sponsored by Assemblywoman Joann Downey conerniing federal tax changes to prepayment guidelines, and ensuring homeowners who have pre-paid property tax payments are able to include these payments as part of their 2017 state taxes.
One of the measures (A-2650) requires the state to accept advance property tax payments as part of the property tax deduction available on state income tax returns. The bill would require the state to recognize that property taxes that were prepaid in 2017 for the 2018 calendar year may be claimed for the 2017 taxable year homestead property tax deduction. Current law prohibits such recognition. A second companion bill (A-3382) permits taxpayers to make dedicated prepayment toward anticipated property taxes. And, lastly, a third bill (A-3241) requires certain financial institutions to adjust mortgage escrow accounts for property taxes prepaid in 2017.
The legislation would also double the maximum New Jersey homestead property tax deduction from $10,000 to $20,000 for the 2017 taxable year to cover many of the 2018 pre-payments that were made at the end of calendar year 2017.
Two additional measures were also approved by the Assembly State and Local panel on Thursday.
Assembly Concurrent Resolution 145 (ACR-145) –sponsored by Assemblyman Freiman-- urges Congress to take swift action to protect New Jersey taxpayers from recently enacted federal tax legislation. Assembly Resolution 117 (AR-117) –sponsored by Assembly members Freiman, Downey and Mazzeo-- urges Congress to address the accounting of mortgage escrow prepayments through requirements on federally-chartered financial institutions.
“Federal tax changes can already cause a lot of confusion for residents getting documents ready to file,” said Downey said. “Homeowners who have prepaid their property taxes should receive credit under the year they paid. The new federal changes take advantage of responsible homeowners and they do not give credit where credit is due.”
The Assembly State and Local Committee released each measure and they will now be considered for a floor vote by the Assembly.