If you serve in the military or have served, New Jersey offers one of the strongest property tax breaks in the country for fully disabled veterans, plus a smaller deduction many other veterans can claim. New Jersey draws many military families after a PCS, which is short for Permanent Change of Station, the official military move from one duty station to another, with Joint Base McGuire-Dix-Lakehurst in Burlington County, Picatinny Arsenal in Morris County, and Naval Weapons Station Earle near the shore. This guide explains the main rules in plain language and points you to the state's own sources. Tax law changes, so treat these figures as a starting point and confirm the current rules before you file.
How New Jersey Helps Disabled Veterans With Property Taxes
New Jersey gives a full property tax exemption to its most severely disabled veterans. As the New Jersey Division of Taxation explains, an honorably discharged veteran who was 100 percent permanently and totally disabled during active duty service may qualify for an annual exemption on the primary residence. The U.S. Department of Veterans Affairs, known as the VA, is the federal agency that certifies that 100 percent permanent and total disability rating.
This is a true exemption, not a small deduction. A qualifying veteran's main home is removed from the local property tax rolls. To qualify, you must have had active duty service in the U.S. Armed Forces, be honorably discharged, be a legal resident of New Jersey, own and occupy the home as your main residence, and provide VA certification that you are 100 percent permanently and totally disabled. Notably, the benefit does not require wartime service.
Surviving Spouses and Partners
The benefit can carry to a surviving spouse or civil union or domestic partner. A surviving partner who has not remarried or formed a new partnership may qualify if the deceased veteran was a New Jersey resident at death and met the service and disability rules, and the survivor owns and occupies the home. Because the details depend on your situation, confirm them with your local assessor and the Division of Taxation before you rely on the benefit.
The $250 Veterans Property Tax Deduction
Veterans who do not have a 100 percent disability still have an option. As the Division of Taxation describes, an honorably discharged veteran with qualifying active duty service may deduct $250 each year from the property tax due on a home. The deduction can also pass to an unremarried surviving spouse. It is modest next to the full exemption, but it is worth claiming if you are eligible.
How It Works With Your Local Tax Bill
Property tax in New Jersey is handled at the local level, and you claim these benefits through your municipal tax assessor. For the full disabled veteran exemption you file Form D.V.S.S.E. with your assessor, along with your documents. For the $250 deduction you file the veteran's deduction claim form. Near Joint Base McGuire-Dix-Lakehurst, that office is in your Burlington County municipality, such as Wrightstown or the surrounding towns.
Because New Jersey has some of the highest property tax bills in the nation, a full exemption or even the $250 deduction can make a real difference in your monthly housing cost. If you are weighing where to settle, our guide to the military bases in New Jersey can help you picture the local cost of owning a home.
Military Pay and New Jersey State Income Tax
New Jersey has a state income tax, but it shields the pay many military families rely on. As the Division of Taxation's information for military personnel explains, New Jersey does not tax U.S. military pension and survivor's benefit payments, no matter your age or disability status. Combat pay is also excluded from New Jersey income for tax year 2021 and after, matching the federal treatment.
Active-duty pay is treated differently. A New Jersey resident generally owes state tax on active-duty military pay, while a service member who keeps another home state and is only stationed in New Jersey is not taxed by New Jersey on that pay. New Jersey also offers a $6,000 income tax exemption for veterans who were honorably discharged or released under honorable conditions. VA disability compensation is not part of your federal income, so New Jersey does not tax it either. Because rates and rules can change, confirm the current details with the Division of Taxation before you file.
A Note for Military Spouses: MSRRA
If you are a military spouse, the Military Spouse Residency Relief Act, known as MSRRA, may matter to you. MSRRA is a federal law that lets a military spouse keep a home state for tax and voting purposes even after moving on military orders. You do not automatically become a New Jersey resident just because your service member got orders here.
Under the related federal rules, a service member, the spouse, or both may choose the service member's home state, the spouse's home state, or the service member's permanent duty station for residency. Because that choice affects both states' taxes, confirm yours before you file. For the property tax exemption in this guide, what usually matters most is that the qualifying veteran owns and lives in the home as the primary residence.
