Important Contact Information• Regional Information Centers
• Customer Service Center– 609/292-6400
• Division of Revenue E-File Unit– 609/633-1132
• Training & Outreach– [email protected]
www.njtaxation.org
New for 2011
• Emancipation Day!!!– Returns due April 17th, 2012
• Charitable Contributions– One new charity
• New Jersey Lung Cancer Research Fund
Reminders
• Roth IRA Conversions done in 2010– 2011/2012 Tax Reporting
• Form NJ-1040-H – Property Tax Credit
• No Tenant Rebate Application– Suspended by the State Budget
• Form 1099-G no longer mailed
Important Processing Information
• Do not staple, clip or otherwise attach pages together
• Place only 1 return for each envelope
• You may not report a loss on Form NJ-1040
• Leave unused lines ‘Blank’
Form NJ-1040
Identifying InformationPage 1
Civil Union / Domestic Partner• Civil Union Couples – Filing Status
– “Married” under NJ Law– IRS does not recognize CU’s
• Domestic Partner – Exemption – Not Married– Line 6 Exemption may apply
• If partner does not file NJ-1040
Line 11: Dependents Attending College
• Must be a dependent– Line 9 or 10
• Full-time College Student– Defined by Institution
• Under age 22– For Entire Tax Year
Form NJ-1040
Reportable IncomePage 2
Tax-Exempt Income• Social Security
• Unemployment Compensation
• Debt Cancellation – Form 1099-C
• Military PensionsRefer to page 21
Wages (Line 14)• Use W-2 Box 16, ‘State Wages’
• State wages often differ from Federal wages (Box 1)
• All W-2s received must be included with the NJ-1040
W-2 Sample
Tax-Exempt Interest (Line 15b)• Obligations of the State of New Jersey
and/or any of its political subdivisions
• Direct Federal Obligations
• Pub GIT-5, Exempt Obligations
Refer to page 23
Must enclose an itemized schedule if line 15b is over $10,000
Net Profits from Business (Line 17)
• Federal Schedule C– Use Federal Expenses and Deduction
– 100% Meal/Entertainment Deduction
– Line 17 ‘Blank’ if Net Loss
– See page 23, NJ Instruction Booklet
Reporting Pension, Annuity, and IRA Income
Line 19
Retirement Plans
Contributory Non-Contributory
fully taxable
Three-Year Rule / General Rule• NJ accounting methods
– No ‘Simplified’ Method
• Client needs Contribution Records
• Often varies from Federal Treatment
Three-Year Rule• If employee contributions recovered within
36 months of date of first pension payment
• Pension income is not reported until contributions are recovered
IRS no longer allows three year rule
General Rule • Percentage is used based on
proportionate share of Contributions to Total Value of the Pension
• This is applied each year to the Pension amount received
Use Worksheet A, pg 24, to determine which pension method to use
2010 Conversions to Roth
• NJ Following the IRS• Deferred until 2011-2012
• NJ/Fed reporting must be the same
IRA Withdrawals• Use Worksheet C, Page 26
• Client Record Keeping– IRA Contributions– Prior Year Worksheet C
• Roth Distributions– Exempt if ‘Qualified’ – page 27
Taxable Pension (Line 19)• Line 19 is for the total of:
– Taxable Pensions (after reduction by Three-year or General Rule)
– Taxable Annuities
– Taxable IRAs
Gambling Winnings (Line 23)• Include Casino and Track Betting
• Include NJ Lottery Winnings– Only with prizes exceeding $10,000
• Substantiated Losses– Can be used to Net total winnings
Record Keeping - LossesSubstantiated through:• Daily log
• Journal
• Canceled check
• Losing race track pari-mutuel tickets
• Losing Lottery Tickets
Pension Exclusion (Line 27a)
• Eligibility:– Age 62/older or Disabled – Total income of $100,000 or less
• Amounts Based on Filing Status– $20,000 – MFJ/HOH/Widow
– $15,000 – Single
– $10,000 - MFS
Retirement Exclusion (Line 27b)
Taxpayer may deduct unused Pension
Exclusion from Line 27a if:
Line 14 ___
Line 17 ___
Line 20 ___
Line 21 ___
Total less than $3,000
Earned Income
Gross Income (Line 28)
No Filing Required if:
• $10,000 or less– Single– Married/CU - Filing Separate
• $20,000 or less– Married/CU Filing Joint– Head of Household– Qualifying widower
Medical Expenses (Line 30)• Unreimbursed medical expenses
– Include MSA Contributions (Archer)
• Expenses in excess of 2% of line 28 Gross Income
Worksheet E, Page 31
Property Tax Deduction/Credit• Enter total property taxes paid (or 18% rent) on
line 36a
• Include Homestead Benefit received as a credit
• PTR applicants – use base year amount
• Residency Status – Line 36b– Homeowner/Tenant
Property Tax Deduction/Credit• Worksheet F
– determines the greater benefit
• Deduction Limited to $10,000– $5,000 MFS
• Enter Property Taxes Paid on Line 36c or a flat $50 credit on Line 48
Tax (Line 38)• Show NJ Tax amount based on taxable
income
• Tax Tables (Pg 53)
• Tax Rates (Pg 62)
Form NJ-1040
Calculating Tax and PaymentsPage 3
Credit for Taxes Paid (Line 40)• Used for NJ Residents who have income
subject to tax out of the state
• Schedule A must be completed
Note: Income must be reported on the NJ-1040
Use Tax (Line 44)• Purchases out of state
– No NJ Sales Tax
• Estimated Use Tax Chart (pg 39)– Absent of Purchase Records
Enter 0.00 if no Use Tax is due
NJ Income Tax Withheld (Line 47)
• Form W-2, Box 17 (State Income Tax Withheld)
• Form 1099-R (Pensions, etc)
• Include amounts from all W-2s & 1099s received
Note: Be sure W-2, Box 15 Shows ‘NJ’
Earned Income Tax Credit (Line 50)
• Eligibility– All NJ Residents who qualify for Federal EITC
are eligible to apply – subject to review
• Calculated Amount – 20% of Federal EIC amount
Excess UI/DI/FLI (Lines 51 - 53)• For people with:
– Multiple employers– Multiple W-2s– With excess UI/DI/FLI contributions
• Must complete and include Form NJ-2450 with NJ-1040
Underpaid or Overpaid• Compare Total Payments (Line 54) to
Total Tax (Line 46)
• If Line 54 is greater than line 46, the difference is an overpayment
• If Line 54 is less than line 46, the difference is due to the state
Refund Amount (Line 65)
Overpayments can be:– Left as a credit for next year;
– Donated (all or in part) to various charitable designations; or
– Refunded to the Taxpayer
Be sure to include requested refund amount on Line 65
Part-Year Residents• Resident only Part of the Tax Year
• Complete ‘Residency Status’– Page 1, Form NJ-1040
• Allocate Income– Just NJ Residency Period
• Pro-Rate Exemptions and Deductions– by Number of Months in NJ
Property Tax Relief Programs• Form NJ-1040-H
– Certain filers only
• Homestead Benefit– Only Homeowners
• Property Tax Reimbursement– Homeowners/Mobile Home Owners
Form NJ-1040-H• Property Tax Credit ($50)
– Age 65/Ovr or Disabled
– No NJ Income Tax Return Filed• Under Filing Threshold
– Did not own Residence on 10/1/11
Homestead Benefit• Owned/Occupied Residence
– On 10/1/11
• Gross Income Under – regardless of filing status– $150,000 – 65/Ovr or Disabled– $75,000 – Everyone else
• Paid as Direct Property Tax Credit
• No Tenant Rebate Application– Suspended by the State Budget
PTR - Eligibility
• Must be Age 65/ovr or Disabled by 12/31/2010
• NJ Resident for at least 10yrs
• Owned and lived in the home for at least 3 years
• Have fully paid property taxes due– by June 1st of following year
Property Tax Reimbursement
Income Eligibility Limits
• 2010– Single/Married $80,000
• 2011– Single/Married $80,000
PTR – Income Limits• Virtually all gross income is included for
PTR eligibility– Social Security– Unemployment– Military Pension– NJ Lottery Winnings
This will often vary from the income tax form
PTR – First Time Filers• Form PTR-1 – available online
– Establishes 2010 and 2011 Eligibility
• Reserves Base Year at 2010 Level
• Difference of 2011 & 2010 Taxes
Proof of Property Taxes must be included with all PTR applications
PTR – 2nd and Later Years• File Form PTR-2
– Comes Pre-Printed with Base Year
• Verifies 2011 Eligibility
• Difference of 2011 and Base Year
Proof of Property Taxes must be included with all PTR applications
Budgetary Approval• All Property Tax Relief Benefits are
Subject to Change
• NJ FY 2013 Budget– Passed by June 30th, 2012
Property Tax Relief Assistance…
• Homestead Benefit– 1-888-238-1233
• Property Tax Reimbursement– 1-800-882-6597
• NJ Tax Hotline– 609-292-6400
www.njtaxation.org
Thanks to our volunteers!