Residents can claim deductions/credits on their New Jersey Income Tax returns for the property taxes they have paid. However, they can take these deductions/credits only in the year in which the property taxes are due. So taxpayers can’t take deductions or credits for 2018 property tax pre-payments on their 2017 New Jersey Income Tax returns (NJ-1040). They must wait until they file their 2018 returns.
Important note: When using tax preparation software, be sure to double check the property tax amount transferred from the Federal 1040 to the NJ-1040. You may need to manually enter the 2017 property tax paid to New Jersey to exclude any prepayment of 2018 property taxes.