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New Member

My NJ Tax return not picking property tax deduction but instead picking a credit

 
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Expert Alumni

My NJ Tax return not picking property tax deduction but instead picking a credit

For the New Jersey state return, it is a credit if you qualify, there is no deduction on the state return.

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New Member

My NJ Tax return not picking property tax deduction but instead picking a credit

I have claimed deduction for many years. It is either deduction or credit and I want to use it as a deduction. 

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Expert Alumni

My NJ Tax return not picking property tax deduction but instead picking a credit

Homeowners and tenants who pay property taxes, on a principal residence in New Jersey, either directly or through rent, may qualify for either a deduction or a refundable credit when filing an Income Tax return.

The property tax deduction reduces your taxable income. You can deduct your property taxes paid or $15,000, whichever is less. 

 

Go back to the New Jersey Tax summary page and Update the Taxes and Credits.  You will be able to enter the information in this section to get the deduction.

 

@jigarym

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New Member

My NJ Tax return not picking property tax deduction but instead picking a credit

Thanks !

 

I did it few times and it always chooses the "Credit"blah.png

 

 

 

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Expert Alumni

My NJ Tax return not picking property tax deduction but instead picking a credit

Credits are typically more valuable than deductions. Credits reduce your tax liability dollar-for-dollar while deductions reduce income prior to calculating the tax liability. TurboTax will choose the most valuable to the taxpayer. We cannot see your return in this forum, but this may be the case. You can review your return to determine the impact.

  • From the menu on the left, click on Tax Tools
  • Click on Tools
  • Choose View Tax Summary
  • Again, from menu on the left, you can preview your NJ return
  • Scroll through the return to determine the impact of the credit

 

 

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New Member

My NJ Tax return not picking property tax deduction but instead picking a credit

There is a definite DEFECT with turbo tax in calculating the tax savings between NJ property tax deduction and property credit of $50.

I have tried this a few times.

For example,

My property tax is 5000. My marginal NJ tax rate is 6.37%

So the effective reduction of tax is property tax deduction is $318

However, it always picks tax credit of $50.

 

Turbo tax, pls fix this bug for NJ property tax deduction vs property tax credit!!

 

Also, if user enters  2 or more residences over the tax year, one as rental and one as home, Turbotax does NOT sum the property tax together, at all and completely ignores the the property tax from the rent apt (18% of your rent paid in that time period). This should be summed together as per NJ tax worksheet G and H in the NJ 1040 instructions!!!

 

PLS FIX THIS.

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Level 7

My NJ Tax return not picking property tax deduction but instead picking a credit

Is it possible that you have been given the benefit of the standard deduction for NJ an an additional $50 credit for real estate taxes.? Things did change a lot this last year. https://patch.com/new-jersey/pointpleasant/2019-tax-returns-what-you-should-know-new-jersey#:~:text=...

 

I hate the new tax law from the Feds. It was done to punish states like New York and New Jersey and to disadvantage home ownership in favor of landlords. Hmmmm

Disclaimer: Not a tax professional. Information gathered from internet links. Anything dated in June 2019 was posted in prior years and is before the 2019 limits and changes.