* The Civil Union Act established “Civil Unions” (CU) equivalent to marriage in New Jersey for same-sex couples. Beginning with tax year 2007, Partners in a Civil Union recognized under New Jersey law are considered to be married for NJ Gross Income Tax purposes and must file their New Jersey income tax returns, and property tax relief program applications, using the same filing status available for married couples.
The “Married” filing categories (on the NJ-1040 and the TR-1040) are now identified as “Married/CU Couple, filing joint return”, “Married/CU Couple, filing separate returns”, and “Qualifying Widow(er)/Surviving CU Partner”. “CU Partner” is the same as a “spouse” in the dependency listing. There is still a distinction for a “Domestic Partner”.
* The reporting of the Pension Exclusion has been changed. Line 19 is now one line to report total taxable pensions, annuities and IRA withdrawals – there is no longer 19a, 19b, and 19c.
Eligible taxpayers will now claim the Pension Exclusion on Line 27a, after calculating their total income (before exclusions) on Line 26. Any Other Retirement Income Exclusion is entered on Line 27b, with the two exclusions totaled on Line 27c. This change will make it easier for filers to determine whether or not they exceed the $100,000 maximum threshold. If the total taxable income exceeds $100,000 the taxpayer(s) cannot claim a Pension Exclusion or Other Retirement income Exclusion.
* Beginning with tax year 2007, all individuals who are eligible for and claim a federal Earned Income Tax Credit will be able to claim a New Jersey Earned Income Tax Credit (NJEITC) equal to 20% of the federal credit allowed. Individuals with NJ Gross Incomes over $20,000 and those without a qualifying child will be able to get a NJEITC on their 2007 Form NJ-1040.
* Resident taxpayers claiming a credit for taxes paid to other jurisdictions must now enter a two-digit code for the jurisdiction at Line 39 of the 2007 Form NJ 1040. A list of jurisdiction codes is provided in the NJ-1040 instruction booklet.
Regarding the property tax relief programs:
* The NJ Division of Taxation continues to waste taxpayer money, and create the potential for senior homeowners to miss out on their check, by having tenants and homeowners apply for the NJ Homestead Property Tax Rebate separately. Once again tenants apply via Form TR-1040, included in the NJ-1040 package, and homeowners must apply either online or by phone later in the year. The homeowner application packages are expected to be mailed out at the end of April.
* The income limits for residents applying for reimbursement under the Property Tax Reimbursement (PTR) Program (aka “Senior Freeze”) are as follows:
For 2007: $45,135 if single, or $55,344 (combined income) if married or in a Civil Union, and
The 2007 PTR applications (Forms PTR-1 and PTR-2) should mailed out in mid-to-late February.