Gottheimer Announces Bipartisan Bill to Cut Taxes, Help Jersey Families Save for Retirement, Help Seniors Stay in North Jersey

Jan 27, 2020
Press

Gottheimer's bipartisan bill allows seniors to avoid housing taxes when downsizing, if proceeds are saved for retirement in a Roth IRA — Bipartisan bill will help North Jersey seniors stay in their communities with their families


Above: Gottheimer announces bipartisan legislation, the Senior Housing Improvement and Retirement Accounts (IRA) Act of 2020, today in Fair Lawn.

Today, Monday, January 27, 2020, U.S. Congressman Josh announced the introduction of a bipartisan bill to help cut taxes for seniors, save for retirement, and help retirees stay in Northern New Jersey. The bipartisan Senior Housing Improvement and Retirement Accounts (IRA) Act of 2020 will help Americans save for retirement and encourage increased savings by allowing seniors who sell their principal residence to avoid paying the capital gains tax on the proceeds from that sale — if they are saved for retirement in a Roth IRA.

New Jersey is one of the best places in the world to raise a family, but it can be difficult for retirees to stay in New Jersey. According to the Tax Foundation, New Jersey residents pay the third highest property taxes in the entire nation. Another study ranked New Jersey as the fifth toughest state to retire in. Furthermore, for the second consecutive year, more residents moved out of New Jersey last year than any other state across the nation.

The Senior Housing Improvement and Retirement Accounts (IRA) Act will help Americans save for retirement and encourage increased savings by:

  • Reducing the taxes paid from the sale of a home and
  • Allowing seniors who sell their principal residence to avoid paying the capital gains tax on the proceeds from that sale if the proceeds are saved in a Roth IRA — for retirement.

“Right now, if you sell your home to downsize, you’re stuck paying taxes on any gains you’ve had on the house over the years. So, if you bought it for $150,000 in 1990 and sold it for $500,000 in 2020 – you need to pay the full state and federal gains over $250,000. That tax hit can really set a retiree back and force them to flee to another state,” said Congressman Josh Gottheimer (NJ-5). “We should be encouraging those who have helped make our Jersey communities great to stay here. We shouldn’t be slapping seniors with outrageous taxes for trying to downsize their homes, making it even less affordable to live here. We need to do everything we can to cut their taxes and help them afford their retirement, and stay close to their friends and families.”

Gottheimer is introducing this bipartisan legislation with Republican Congressman, and fellow Problem Solver Caucus member, John Katko (NY-24).

Gottheimer made today’s announcement in the Borough of Fair Lawn, which, through its Senior Citizen Advisory Committee, its leadership, and its partnerships with local organizations, is focused on addressing issues facing senior citizens and retirees, improving their quality of life, and integrating aging-friendly community building into local planning.

Gottheimer was joined today by Assemblywoman Lisa Swain, Fair Lawn Mayor Kurt Peluso, Chair of the Fair Lawn Senior Citizen Advisory Committee Daniella Jordan-Mays, and Fair Lawn Councilman Kris Krause.

View an overview of the Senior Housing IRA Act HERE.

Watch today’s announcement HERE

Gottheimer’s full remarks as prepared for delivery are below.

Fair Lawn is a wonderful, closely-knit community that always focuses on doing right by its residents — including boosting education and enforcement for pedestrian safety, and as we are going to talk about today, working to make the community even more aging-friendly. Through its Senior Citizen Advisory Committee, Fair Lawn, and its leadership, is consistently focused on addressing issues facing senior citizens and retirees, how to improve their quality of life, and integrating aging-friendly community building into local planning.

Like so many of our northern New Jersey communities, the numbers prove that raising a family here in New Jersey is a good investment: More than sixty-five percent of our children receive Pre-K education, well above the national average of forty-eight percent. High school graduates receive some of the highest Advanced Placement scores in the country, and rank second for high school graduation rate in the nation, giving us one of the smartest talent pools in the nation. Our towns are some of the safest in the country, thanks to our excellent first responders, and, of course, you can’t beat the idyllic beauty of our neighborhoods, and proximity to lakes, beaches, mountains, and New York City. And then there’s the pizza, bagels, and Springsteen …

To anyone looking to raise a family, New Jersey is one of the best places in the world to do it.

But, as incredible as the Garden State is, I think we can all agree that, because of the cost of owning a home, it’s simply becoming too expensive to live here.  This is especially true for our seniors living on a fixed income, and it got even worse after the Red States stuck it to us and blocked how much of our property and state taxes we could deduct. 

I want to do everything we can to help seniors retire and stay in New Jersey in their golden years, so they can be close to their families, and friends, and keep giving back to the towns they helped build. That’s why I’m announcing new bipartisan legislation — the Senior Housing IRA Act of 2020 — to help seniors by reducing the taxes paid from the sale of their home and helping put those dollars into their retirement savings. This extra boost toward retirement will help seniors who want to downsize, once their kids are out of the house, and afford to stay in New Jersey — instead of packing up and moving elsewhere to places like Florida and North Carolina.

I think we need to do everything we can to cut taxes and make living here more affordable for our families. In New Jersey, we pay the third highest property taxes in the entire nation, according to the Tax Foundation.  And our return on investment for all of those dollars has slipped; our roads are fifth worst in the nation and our transit system has the most breakdowns of any system in the country. On top of that, after they gutted SALT, we really got hosed by the Moocher States, and we are paying more of their bills than ever before, with fewer federal dollars coming back home. That’s fewer federal dollars to help us cover our state and local bills.

Combine that with the high cost of commuting and health care, and too many families are being forced out of the state as soon as their children graduate high school.

In fact, for the second consecutive year, more residents moved out of New Jersey last year than any other state across the nation. According to the New Jersey Society of Certified Public Accountants, nearly 60 percent of New Jersey CPAs said they would advise clients leave New Jersey because of higher taxes. WalletHub ranked New Jersey as the fifth toughest state to retire in. 

But despite these statistics, what I hear day in and day out from my constituents is that they want to stay in New Jersey when they retire. They really want to stay close to their friends and family, and in their beautiful, safe communities.  So, just like Fair Lawn is doing, we need to do everything we can to help them.  We need to fully reinstate the State and Local Tax Deduction, and get the Senate to pass what we got done in the House in December, and we need to help seniors afford retirement. 

We all know that a home can be one of the most important assets a family has; it’s often the place where we have made our greatest investments over the years. Right now, if you sell your home to downsize, you’re stuck paying taxes on any gains you’ve had on the house over the years. So, if you bought it for $150,000 in 1990 and sold it for $500,000 in 2020 – you need to pay the full state and federal gains over $250,000. That tax hit can really set a retiree back and force them to flee to another state.

For some reason, the U.S. tax code includes retirement savings accounts such as 401(k)s and Individual Retirement Accounts (IRAs) — but retirees are blocked from tapping one of their largest savings devices: the equity they’ve built up in their homes. I’m proposing that we change that.

We should be encouraging those who have helped make our Jersey communities great to stay here. We shouldn’t be slapping seniors with outrageous taxes for trying to downsize their homes, making it even less affordable to live here. We need to do everything we can to cut their taxes and help them afford retirement.

The bipartisan legislation I’m introducing with my fellow Problem Solver Caucus member, Republican Congressman John Katko from New York, allows seniors who sell their home to avoid paying the capital gains tax if they save those gains for their retirement in a Roth IRA. The Senior Housing IRA Act of 2020 will apply to homeowners who have owned their homes for twenty years or more and who are age fifty-five or older.

The Senior Housing IRA Act is a once in a lifetime credit for these seniors to use; allowing for a one-time exemption of the current Roth IRA contribution limits of $7,000 for those nearing retirement.

Imagine being able to jump-start your retirement by $50,000 or more – that could change where, when, and how you retire. Many of the seniors who need this legislation were deeply impacted by the 2008 recession and, for many, their retirement account is still not back to pre-2008 levels. This legislation gives them the extra boost they need.

For our seniors, this is a bipartisan bill to thank them for raising their families here, for growing their businesses here, for doing so much for our communities, churches, and temples, and for paying all of those property, state, and local taxes here over the years.

The Senior Housing IRA Act will help seniors in retirement by reducing the taxes paid from the sale of their home and helping put those dollars into their retirement savings.

This bipartisan legislation is exactly what so many of our seniors need to afford to stay here in their golden years, spending time with their families, listening to Bruce Springsteen and Frank Sinatra, and eating the best pizza in America.  We are all very lucky to live in the greatest country in the world, with our best days ahead of us. Thank you, may God bless you, and may God continue to watch over and bless the United States of America.

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