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Are there any tax relief programs?

Last Updated: 01/26/2021

Paycheck Protection Program Loans

New Jersey will follow the federal government's lead in allowing Paycheck Protection Program (PPP) loans to be tax exempt at the state level and enable recipients to deduct business expenses that were paid with the tax-exempt loan proceeds, thereby enhancing the tax benefits of the loans.

For the 2020 tax season, related expenses paid for with PPP loans will be deductible for both Gross Income Tax (GIT) and Corporation Business Tax (CBT) purposes and forgiven loans will be excluded from being subject to either tax.

The PPP was established by the federal CARES Act (Coronavirus Aid, Relief, and Economic Security Act) in 2020 in response to the economic impact of COVID-19 in order to help small businesses keep employees on their payroll during the pandemic.

For more information, refer to theGovernor's press release.

Senior Freeze Property Tax Relief

The deadline for senior homeowners to apply for the Senior Freeze property tax relief program has been extended from December 31, 2020 to February 1, 2021.

The program reimburses eligible senior citizens and disabled persons for property tax or mobile home park site fee increases on their principal residence. For more information on the Senior Freeze program, including eligibility requirements and how to apply, visit the NJ Treasury Department's Senior Freeze program page.

Military Combat Pay

On September 28, 2020 Governor Phil Murphy signed legislation (S2050) to exclude military pay for service in a combat zone, or for hospitalization as the result of injury while serving in a combat zone, from gross taxable income under the New Jersey income tax.

The bill excludes combat pay in the same manner as federal taxation does. A combat zone is defined as any area the President of the United States designates by Executive Order as an area in which the U.S. Armed Forces are engaging or have engaged in combat.

Unemployment Insurance Payroll Tax Reduction

Under new legislation, businesses' unemployment insurance (UI) contribution rates have been reduced through Fiscal Year 2023.

The bill also permits nonprofit and governmental employers that elect to make UI payments equal to the full amount of benefits paid to individuals attributable to service in the employ of the nonprofit or governmental employer to reduce their UI benefit payments by fifty percent for the duration of the public health emergency.

Additional Resources

The IRS has established a resource page to help taxpayers, businesses, and others affected by COVID-19.

For information on the State's property tax relief programs, visit: https://www.state.nj.us/treasury/taxation/relief.shtml

Source: https://www.nj.gov/governor/news/news/562020/approved/20200413c.shtml; https://www.nj.gov/governor/news/news/562020/approved/20200401a.shtml, https://www.irs.gov/newsroom/tax-day-now-july-15-treasury-irs-extend-filing-deadline-and-federal-tax-payments-regardless-of-amount-owed; Governor's Remarks 4/15/20; Executive Order No. 130; Executive Order No. 189; https://nj.gov/governor/news/news/562020/approved/20200928a.shtml; https://nj.gov/governor/news/news/562021/approved/20210209b.shtml