Bill Text: NJ S1004 | 2020-2021 | Regular Session | Introduced
Bill Title: Provides gross income tax deduction for certain home elevation expenses.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-01-30 - Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee [S1004 Detail]
Download: New_Jersey-2020-S1004-Introduced.html
Sponsored by:
Senator JOSEPH F. VITALE
District 19 (Middlesex)
SYNOPSIS
Provides gross income tax deduction for certain home elevation expenses.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a gross income tax deduction for certain home elevation expenses and supplementing Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For taxable years beginning on or after January 1, 2020 but before January 1, 2023, a qualified taxpayer shall be allowed to deduct from the taxpayer's gross income for the taxable year, an amount equal to 25 percent of the qualified expenses paid in the taxable year to a registered home elevation contractor for elevating the taxpayer's primary residence.
b. As used in this section:
"Qualified expenses" means expenses paid for jacking and resetting only, exclusive of costs for construction, disconnecting and re-connecting utilities, building a new foundation, painting, landscaping, re-attaching porches or decks and similar attendant home elevation services.
"Qualified home elevation contractor" means a home elevation contractor registered with the Division of Consumer Affairs in the Department of Law and Public Safety in accordance with P.L.2014, c.34 (C.56.8-138.2 et al.), and in compliance with all applicable laws and regulations.
"Qualified taxpayer" means a resident taxpayer whose primary residence in the State is located in a Special Flood Hazard Area as identified on the current Flood Insurance Rate Map or Preliminary Work Map issued by the Federal Emergency Management Agency (FEMA), and whose primary residence before home elevation is undertaken is below the base flood elevation on the current Flood Insurance Rate Map or Preliminary Work Map.
c. A taxpayer who benefits from home elevation assistance through the Flood Mitigation Assistance, Pre-Disaster Mitigation, or Hazard Mitigation Grant Programs funded by FEMA, or Increased Cost of Compliance coverage under the National Flood Insurance Program, or the New Jersey Low-to-Moderate Income Homeowners Rebuilding Program shall not be eligible to claim the deduction provided by this section.
2. This act shall take effect immediately and shall be retroactive to January 1, 2020.
STATEMENT
This bill provides a gross income tax deduction for a portion of the home elevation expenses paid in the taxable year by certain taxpayers who reside in areas designated by the Federal Emergency Management Agency (FEMA) as special flood hazard areas.
This deduction, which will be available for taxable years beginning on or after January 1, 2020, but before January 1, 2023, will be equal to 25 percent of the expenses paid by the taxpayer for jacking and resetting services provided by a qualified home elevation contractor registered with the Division of Consumer Affairs in the Department of Law and Public Safety. A taxpayer who receives home elevation assistance under certain FEMA-funded grant programs, Increased Cost of Compliance coverage, or the New Jersey Low-to-Moderate Income Homeowners Rebuilding Program would not be eligible to claim the deduction provided by the bill.
Jacking and resetting alone, the "elevation" component of the full home elevation service, can cost between $12,000 and $30,000 depending on the size and complexity of the home, while complete full service turn-key costs for home elevation can total between $40,000 and $150,000. The purpose of the bill is to assist taxpayers who are required to obtain flood insurance, or face considerable increases in the cost of their flood insurance under the National Flood Insurance Plan, by allowing them to deduct a portion of the costs incurred for home elevation. Homeowners who reside in areas newly designated by FEMA as Special Flood Hazard Areas will be required to carry flood insurance when the Flood Insurance Rate Maps are in effect. By elevating their homes to or above FEMA base flood elevations, they will qualify for lower flood insurance premiums.
