11 Apr Why do senior citizens have to pay school taxes?

Q. Why do seniors have to pay school taxes? School tax is often more than regular property tax. Seniors would live a better life if it wasn’t for this tax. People are struggling to live on a fixed income from Social Security.
— Taxed too much

A. Yikes. That’s a big question.

Let’s get the “why” addressed first. Like it or not, we as citizens pay taxes, which support community programs as a whole. Police and fire services. The military. Non-drivers pay money to keep the roads in order.

And those who don’t have children contribute to taxes that pay for schools.

According to a 2023 article published by the Tax Foundation, New Jersey has the highest property taxes in the U.S.

When it comes to the breakdown of how a resident’s taxes are spent, 52.7% is for school taxes, 29.6% for municipal taxes, and 17.6% for county taxes according to a joint study of the NJ CPA Society, the NJ Realtors Association and the Association of Municipal Assessors.
New Jersey, though, does offer programs to help ease the property tax burden for seniors, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

Mott ran through the programs.

There is a senior property tax deduction of $250.

For those age 65 or older or disabled who qualify, an application can be filed with the local municipal tax assessor for this benefit, she said.

The applicant must be a legal resident of New Jersey for at least a year prior to Oct. 1 and the home must be owned and occupied as of Oct. 1. Income may be no more than $10,000, but there many exclusions that can be taken to arrive at the applicant’s income figure. Claim form PTD must be filed for an initial application and form PD5 should be filed annually to continue the deduction. More information can be found online or by calling 609-292-7974/7975.

Local municipal tax assessors may also help with the completion of the application, she said.

Then there’s the ANCHOR program, which stands for Affordable NJ Communities for Home Owners & Renters. This is an expanded version of the previous New Jersey Homestead Benefit program, Mott said.

The Treasury is finishing paying out for the 2020 tax year benefit, and the next one — assuming it’s funded in the state budget this summer, would be for the 2021 tax year.

If the amounts stay the same as the 2020 benefit year, homeowners age 65 or older with incomes up to $150,000 would qualify for a $1,750 rebate. For homeowners with incomes between $150,000 and $250,000, the rebate drops to $1,250. To qualify, residents must have been in their home as of Oct. 1, 2021 and must be up to date on property tax payments. For renters, the benefit would be $700.

Applications for the 2021 ANCHOR won’t be available until later this year, again, assuming it’s passed as part of the new budget.

Then there’s the Senior Freeze, a property tax reimbursement program available to New Jersey residents age 65 or older or those who are receiving federal Social Security Disability benefit payments as of Dec. 31, Mott said.

The program will reimburse eligible applications for increases in their property taxes which may occur from one year to the next, she said.

The filing deadline for the 2023 application is Oct. 31, 2024.

Age and income are two factors as well as how long someone has in their residence or mobile home, she said.

You can get more information here.

And finally, the state passed a new program called Stay NJ, which is set to start in 2026 and cut property taxes for seniors by 50% with a $6,500 limit. But it’s still too soon to know whether this program will be properly funded in time. Stay tuned for that.

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This story was originally published in April 2024.

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