New Jersey Senate Bill S1838

New Jersey 2022-2023 Regular Session

• Introduced: 2/28/22
• Refer: 2/28/22

Caption

Provides gross income tax deduction for certain home elevation expenses.

Impact

The introduction of S1838 is likely to have significant implications for state laws regarding homeowners' flood insurance responsibilities. By facilitating home elevation through tax deductions, the bill aims to alleviate the financial burden on homeowners who face steep flood insurance costs. Those who elevate their homes to or above FEMA’s designated flood elevations would be afforded lower insurance premiums, thus promoting financial safety for residents in high-risk areas.

Summary

Senate Bill S1838 aims to provide a gross income tax deduction for certain home elevation expenses incurred by taxpayers residing in areas classified as Special Flood Hazard Areas by the Federal Emergency Management Agency (FEMA). The bill allows qualified taxpayers to deduct 25% of the costs associated with elevating their primary residence, specifically targeting expenses related to jacking and resetting in order to meet FEMA's base flood elevation standards. This deduction is intended to incentivize homeowners to elevate their properties, thereby potentially reducing their flood insurance premiums.

Contention

Debate surrounding S1838 may arise regarding its fiscal implications and equitable access to the benefits it provides. Some may question whether offering a tax deduction is the most effective method to support homeowners or if the eligibility criteria are adequately inclusive. Additionally, there may be concerns regarding the financial viability of the state’s approach in providing such deductions, particularly given the potential high costs associated with home elevation. Limitations on eligibility for taxpayers already receiving assistance through FEMA-funded programs may also lead to discussions on fairness in benefit distribution.