07 Aug How does my traditional IRA count for Senior Freeze income?

Q. Is any of my traditional IRA that is not withdrawn counted as income on the New Jersey Senior Freeze form?
— Retiree

A. IRA balances won’t matter for the Senior Freeze. It’s only concerned with your income, so any distributions from an IRA would count. But the balances of the IRA, as long as they stay in the IRA, won’t count.

The state’s website details how you are to determine income for Senior Freeze. https://www.nj.gov/treasury/taxation/ptr/income.shtml

“With few exceptions, all income that you received during the year must be taken into account when determining eligibility,” it said. “This includes income that you do not have to report on your New Jersey Income Tax return, such as Social Security benefits, unemployment benefits, disability benefits, and tax-exempt interest.”

It said you must also allocate jointly owned income sources based on your percentage of ownership, and you cannot apply a loss in one category of income against income or gains in another.

It specifically says these items should not be included in income:

• Middle-Class Tax Rebates;
• Paycheck Protection Program (PPP) loan amounts forgiven through the federal CARES Act or federal Paycheck Protection Program;
• Economic Impact Payments (stimulus payments);
• Middle Class Tax Rebates;
• Forgiven Paycheck Protection Program (PPP) loans;
• Benefit amounts received under the New Jersey State Lifeline Credit program/Tenants Lifeline Assistance program;
• ANCHOR Benefits;
• Homestead Benefits;
• Senior Freeze Benefits;
• Proceeds from spouse’s/civil union partner’s life insurance;
• Capital gains on the sale of a principal residence of up to $250,000 if single, and up to $500,000 if married/civil union couple. Capital gains in excess of the allowable exclusion must be included in income. (Capital gains and the exclusion of all or part of the gain on the sale of a principal residence are calculated in the same manner for both federal and State Income Tax purposes.);
• Stipends from the Volunteers in Service to America (VISTA), Foster Grandparents and Workforce 55+ programs; and programs under Title V of the Older Americans Act of 1965;
• Proceeds received by the beneficiary of a Special Needs Trust;
• Proceeds received from viatical settlements;
• Agent Orange payments;
• Reparation payments to Japanese Americans by the federal government pursuant to Sections 105 and 106 of the Civil Liberties Act of 1988, P.L. 100-383 (50 U.S.C. App. 1989b-4 and 1989b-5);
• Amounts paid as reparations or restitution to Nazi Holocaust victims pursuant to P.L. 1998, c.113;
• Rewards involving health care fraud or abuse that apply to N.J.A.C. 10:49-13.4;
• Rollovers from one financial instrument (pension, annuity, IRA, insurance contract or other retirement benefit) to another financial instrument;
• Tax-free exchanges of a policy or contract handled between two insurance companies;
• Insurance policyholder’s original contributions if demutualization of the policy occurs;
• Income Tax refunds (New Jersey, federal, and other jurisdictions);
• Section 8 payments received by homeowners;
• Reverse mortgage amounts received.

Email your questions to .

This story was originally published in August 2024.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.