Pennacchio: New Jersey Can Provide Immediate Relief by Removing its Own $10K Cap
Senator Joe Pennacchio (R-26) cautioned against Governor Phil Murphy’s scheme allowing homeowners to contribute to municipal charitable funds in lieu of making property tax payments, as it will likely not pass IRS tax review.
Sen. Joe Pennacchio said New Jersey could provide immediate tax relief by removing its $10,000 cap on the property tax deduction that state income taxpayers can claim. (Wikimedia Commons)
“While I agree with the intentions of Governor Murphy, I stress the importance of a real property tax relief plan,” Pennacchio said. “Trenton must take responsibility for our high property tax problem and immediately create a solution, such as removing New Jersey’s property tax deduction cap. The removal of our cap is instant relief which doesn’t depend on the IRS for approval.”
State and local tax (SALT) deductions previously provided American families and retirees about $100 billion in property relief.
Pennacchio’s bipartisan legislation, S-413, would lift the maximum deduction for property taxes allowed by the state, reducing the tax burden on New Jersey residents.
During his Budget Address, Governor Murphy highlighted Senator Pennacchio’s efforts in providing New Jersey residents with real property tax relief. The previous administration explained that increasing New Jersey’s deduction would provide $150 million to $170 million in property tax relief, according to reports.
“New Jersey leads the nation in highest property taxes,” Pennacchio added. “This workaround of federal tax code may place our citizens in harm’s way and expose them to unnecessary IRS fines. However, by eliminating our state’s property tax deduction cap, we can provide New Jerseyans with true tax relief.”
“I strongly suggest that New Jersey families check with their accountants before entering into this tax scheme,” Pennacchio said. “Possible implications may be fines, interest, penalties, or an eventual audit.”
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