27 Feb Our Senior Freeze was denied. What can we do?

Q. Our application for the Senior Freeze was denied because our income was too high. Included in our income was a PPP loan and a Roth conversion. We have had an S-Corporation since 1995 and we are the only employees. We draw a salary and we qualified for the PPP loan, which was forgiven. I thought this income could be excluded for the Senior Freeze, but now we’re being told that because the income went through our S-Corp., it appears as regular income on our tax return. Because our income had fallen during COVID, we did a Roth conversion, so that appeared as income also. When I called the Senior Freeze office about the denial, I couldn’t reach a person. Is there anything I can do?
— Homeowner

A. Your situation is complicated, but lots of people’s income situations changed because of COVID.

You’re going to have to keep sending in documents and trying to reach the agency.

The PTR instructions for the Senior Freeze details what income should not be included to determine eligibility, said Ken Bagner, a certified public accountant with CLA in Livingston.

He said the instructions specify that Paycheck Protection Program (PPP) loan amounts that are forgiven should be excluded.

“I am not sure how New Jersey can distinguish between it coming through an S Corp.,” Bagner said “Most people who received PPP received it through their business, so it should be implied that for the Freeze the PPP is excluded.”

Also addresses your Roth conversion.

It says, on page 8: “Do not include income from a direct rollover to another financial instrument, a tax-free exchange of a policy or contract between two insurance companies, or a conversion from an existing traditional IRA to a Roth IRA.”

Bagner recommends you call the Senior Freeze hotline at (800) 882-6597 and read those specific instructions to the representative, and ask them to amend your filing. If they’re not receptive, ask for a supervisor, he said.

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This story was originally published on Feb. 27, 2023.

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