NJ ANCHOR

Forum|Forum|2 years ago
April 14, 2024
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NJ ANCHOR program is property tax tax relief for homeowners and tenants issued in 2023 for year 2020 and 2019. NJ says it is not taxable income. Some call anchor REBATE ??

Some reports say its not taxable on Federal income tax as well if you use standard deduction that year and own single family home.

I used standard deduction and i have 2 family home deducting 50% of property taxes on schedule E.

IN year 2023 i received $1500.00 for year 2019 and $1500.00 for 2020 tax year. So total received in my bank year 2023 = $3000.0

My property taxes =$8000 , $4000.00 deducted on sch E Do i? Lower $4000 I'm deducting by $1500 which is half of the i received $3000 , or do i add $1500 to schedule E income as some people say?

Best answer by fanfare

"Other uncommon income"

There are other places you can report a prior year recovery.

Schedule 1 Line 1
IRS Instructions recommend Schedule 1 Line 8z.

Opus 17

Employee

The rebate is taxable to the extent you received a previous tax benefit from any deduction related to property taxes.

For the 50% of your home that is a rental, $1500 should be treated as rental income for 2023. (You could also reduce your current year property tax deduction by $1500, it has the same effect.)

For the 50% of your home that is your personal property, you have to look at your 2019 and 2020 tax returns to determine if you received a tax benefit from deducting property taxes. If you used the standard deduction in 2019 and 2020, then you did not receive a tax benefit, and the $750 rebate per year that is allocated toward your personal property is not taxable. If you did claim the itemized deductions on schedule A and included property taxes, then the fact that you deducted the taxes in 2019 or 2020 (or both) means that the rebate is taxable now as a taxable recovery, meaning a reimbursement of a previous deduction. Taxable recoveries are entered as miscellaneous income in the "Other uncommon income" section of the program.