20 Feb Do I include Roth IRA distributions on the PAS-1?

Q. I was looking at the New Jersey 2025 PAS-1 application and I’m a little unclear about the question about Roth IRAs. The instructions are unclear. Do they want you to include qualified Roth IRA distributions even though New Jersey does not require these to be reported since they are not taxed? In my opinion, I don’t think New Jersey should consider Roth distributions.
— Homeowner

A. The PAS-1 is the combined application covering ANCHOR, the Senior Freeze and Stay NJ property tax benefits.

You’re not going to like this.

New Jersey does require certain Roth IRA distributions to be included in income for PAS‑1, and this appears to apply whether the Roth IRA is inherited or your own, said Gerard Papetti, a certified financial planner and certified public accountant with U.S. Financial Services in Fairfield.

The PAS‑1 instructions explicitly state that you must include “the amount of any qualified distribution from a Roth IRA or the amount rolled over from a Roth IRA to another Roth IRA” in the income worksheets used to determine eligibility for the combined property tax relief programs, he said.

This “Roth IRA” language is not limited to owner accounts and does not carve out inherited Roth IRAs, so it appears that any qualified distribution from an inherited Roth IRA is treated the same way as a qualified distribution from your own Roth IRA for PAS‑1 income purposes, he said.

Roth IRA rollovers are specifically included in the income calculation for these programs, again without distinguishing owner versus inherited accounts, he said.

“PAS‑1 reiterates that qualified Roth IRA distributions/withdrawals must be included in PAS‑1 income, and that this is a distinct rule from the normal NJ‑1040 treatment where qualified Roth distributions are excluded,” he said.

“Because the PAS‑1 instructions do not provide a separate exception for inherited Roth IRAs, distributions from an inherited Roth that meet the `qualified distribution’ rules are counted in determining whether you exceed the income limits for the PAS‑1 property tax relief programs,” Papetti said.

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This story was originally published in February 2026. 

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