Thousands Of N.J. Seniors Caught Up In Tax Exempt Pension Snafu
TOMS RIVER, N.J. (CBSNewYork) — Imagine being given hundreds of dollars to help pay your property tax bill only to be told you need to pay it back.
That’s what’s happening to thousands of New Jersey residents.
“I was shocked. I couldn’t understand it. I said, ‘I don’t owe this money,’” Beryl Nolan told CBS 2’s Christine Sloan.
Nolan said the New Jersey Treasury Department mailed her a letter claiming she has to repay $1,800 to a state senior citizen program that helps pay her property taxes because she failed to report income that puts her above the qualification level.
She said it turns out the state wrongly classified a tax-exempt pension roll over as taxable income.
“I think it’s terrible, unconscionable what they’re doing to people. Some of them can’t manage themselves like that and they get scared,” Nolan said.
“I don’t give up easily. I said if I don’t have to pay something I am not going to pay it until I am sure.”
But 80-year-old Alma Woods of Berkeley Township, who is also part of the “senior freeze” program, didn’t have that attitude.
“Once I get a letter and it says I owe money I write out a check,” Woods said.
But Woods’ accountant, who has dozens of cases like this, and her friend stepped in, saying her problem was a roll over, too.
“It is very upsetting to her. She’s on a walker. She can’t get into the closet where the file cabinet is now,” friend Carol Peterson said.
New Jersey Treasury spokesperson Andrew Pratt said: “The state has to conduct audits of the senior freeze program to find and prevent fraud.” And that “unfortunately the audits sometimes flag people who have done nothing wrong.”
The spokesperson recommended people like Bobbi Zink, who got the letter, send in proper paperwork.
“And the burden of proof is on these seniors,” said Zink, of Toms River.
If you think you’ve been unfairly targeted, the Treasury Department recommends having your 1099R form on hand as well as the receipt on the tax-exempt roll over. If you’re confused, you should contact your accountant or financial advisor.
New Jersey has sent out 7,000 audit letters in 2011. A year ago, 1,200 were mailed. Seven hundred people ended up paying the state more than a million dollars.
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