11 Nov Will my ANCHOR property tax benefit be taxed?

Q. I know the ANCHOR property tax payouts are not taxed by New Jersey but what about on my federal tax return?
— Homeowner

A. We’re glad you’re asking.

The new ANCHOR property tax benefit is bringing up a lot of questions.

The ANCHOR funds are a reduction of your real estate taxes, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.

He said it’s not shown as income.

“For example, if your real estate taxes are $12,500 and you received $500 as the ANCHOR payment, you would reduce the real estate tax deduction by the ANCHOR amount, resulting in $12,000,” he said. “Since the federal limit for SALT — State and Local Taxes — is limited to $10,000, in this example, it would have no effect.”

Also, if you do not itemize your deductions, it also would have no effect, he added.

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This story was originally published on Nov. 11, 2022.

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