TRENTON – Legislation sponsored by Senator Joseph F. Vitale that would provide income tax deductions for certain home elevation expenses was approved today by the Senate Environment and Energy Committee.
The bill, S-2278, would provide a gross income tax deduction for a portion of the home elevation expenses paid in the taxable year by taxpayers who reside in areas designated by FEMA as Special Flood Hazard Areas.
As of early 2016, FEMA issued preliminary Flood Insurance Rate Maps or Preliminary Work Maps for the coastal, bayshore and riverine counties of the state, allowing homeowners the opportunity to compare the current elevation of their homes to preliminary FEMA base flood elevations. When the Flood Insurance Rate Maps are eventually finalized and become effective through adoption by the localities, the flood insurance premiums of homeowners whose homes are below FEMA base flood elevations will increase substantially.
“We’ve seen the devastation that happened following Superstorm Sandy, with homes lost or destroyed by the storm and flood maps redrawn by FEMA,” said Senator Vitale (D-Middlesex). “This bill will serve to help those who will be required to obtain flood insurance for the first time or who face considerable increases in flood insurance premiums in the near future to alleviate some of the significantly large costs to elevate their homes.”
The deduction, which would be available for taxable years beginning on or after January 1, 2016 but before January 1, 2019, would be equal to 25 percent of the expenses paid by the taxpayer for jacking and resetting services provided by a registered home elevation contractor for elevating their primary residence.
Taxpayers that benefit from 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.
The bill was approved by the Senate Environment and Energy Committee by a vote of 4-0. It next heads to the Budget and Appropriations Committee for consideration.