Understanding the ‘Senior Freeze’ base year

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Q. We want to help a patient in our chiropractic clinic. His treatment isn’t covered by his insurance and he mentioned that he is behind on all of his bills. He can’t pay his $10,000 a year property taxes and his Social Security is less than that. If he qualifies for the Senior Freeze, I’m wondering, given that he’s nearly 90 but he never applied, would his base year be retroactive to when he was 65?
— Good Samaritan

A. It’s kind of you to try to help this man.

Under the New Jersey Senior Freeze Program, eligible senior citizens are reimbursed for the cumulative property tax increase on their principal residence located in New Jersey.

The “base year” is defined as the first year that all of the eligibility requirements were met, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Eatontown.

The eligibility requirements are as follows:

1. The homeowner or spouse is age 65 or older or receiving Social Security disability benefit payments.

2. The homeowner has lived in New Jersey continuously for at least the last 10 years, as either a homeowner or renter.

3. The homeowner has resided in their current home for at least the last 3 years.

4. The full amount of property taxes due on the home has been paid.

5. The income limits have been met (income did not exceed $87,007 for 2016).

Assuming your chiropractic patient meets all the eligibility requirements, he would be entitled to a reimbursement for the excess of the 2016 real estate taxes over his 1991 real estate taxes, which indeed would be a sizable amount, Becourtney said.

“However, his failure to have paid his current year taxes invalidates him from the program as one cannot have a delinquency and receive a property tax reimbursement under the program,” he said.

Becourtney said your patient would have to submit proof of payment of the current year property taxes – either cancelled checks or receipts or Form 1098 showing the taxes paid out of an escrow account.

“So until your client gets current with his real estate taxes, he cannot apply for a reimbursement under the program,” he said.

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This post was first published in August 2017.

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