Monday, December 29, 2008

WHAT’S NEW FOR NEW JERSEY AND NEW YORK TAXES FOR 2008

There is really nothing much new on the actual 2008 Form NJ-1040. There has been no change in the New Jersey Gross Income Tax rates for tax year 2008. And the form is pretty much exactly the same as 2007 – except for two minor changes.

(1) Beginning with tax year 2008, residents must indicate on their New Jersey gross income tax return whether or not each dependent listed on the return has health insurance coverage on the date the return is filed. This is done by checking a box after the normal dependent information reported on Line 13 of Page 1.
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(2) There is a minor change in the number of lines on Page 2 (on the form I downloaded from the NJDOT website). The Credit for Income Taxes Paid to Other Jurisdictions is now entered on Page 3.

As far as the actual tax law, the NJDOT website reports the following “Important Changes for 2008”-

Earned Income Tax Credit
For tax year 2008, the amount of the New Jersey earned income tax credit (NJEITC) will be equal to 22.5% of the applicant’s Federal earned income tax credit – up from 20% for 2007.
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Federal Economic Stimulus Payments
For New Jersey Gross Income Tax purposes the treatment of the Federal economic stimulus payments to individuals is the same as the federal treatment - these payments are not considered taxable income and should not be reported on the 2008 NJ-1040.
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Designated Contribution
The New Jersey Veterans Haven Support Program Fund has been added to the list of organizations to which taxpayers can contribute on the New Jersey tax return. To donate to the new fund, taxpayers must specify code number “08” at the “Other Designated Contribution” line.
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Credit for Taxes Paid to Other Jurisdictions
The Philadelphia nonresident wage tax rate for 2008 is .037242 from January 1 to June 30, 2008, and .035392 from July 1 to December 31, 2008.
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The method used to apply for the NJ Homestead Rebate has not changed. Tenants who meet the eligibility requirements use Form TR-1040 - Page 4 of the 2008 NJ-1040 - to apply for the rebate. The separate application package for homeowners should be mailed at the end of April, and homeowners will once again apply either online or by phone. I still say it would be much “more better” for all concerned if the homeowner application was also included in the filing of the NJ-1040!
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Applications for the Property Tax Reimbursement Program (Forms PTR-1 and PTR-2) are expected to be mailed out in mid to late February. This program (aka Senior Freeze) reimburses eligible senior citizens and disabled homeowners for property tax increases. The deadline for filing the application is stated as June 1, 2009, but this date has always been been pushed back to October 31st in the past.

Legislation approved in December 2008 increased the income eligibility limits for the PTR Program for tax year 2007 and after. Homeowners applying for reimbursements for tax year 2008 must have total annual income of $70,000 or less. The income limitation for 2007 was increased to $60,000. These limits apply regardless of marital/civil union status – there is no longer different limitations for married and single. If an applicant’s status is married/CU couple, combined income of both spouses/CU partners must be reported – an additional “marriage penalty”.

Qualified NJ homeowners who did not file a 2007 PTR application because their income exceeded the limitations in place at the time have until March 31, 2009 to file a 2007 application. The NJDOT will be mailing applications to residents who may be eligible under the new income limits in early January. For more information click here.

There is also nothing much new on the 2008 New York State IT-201 (Resident) or IT-203 (Non-Resident and Part-Year Resident). The forms appeared to be exactly the same as 2007 in my brief review.

Here is what is new for New York for 2008 –

(1) The New York City School Tax Credit has been eliminated for residents with AGI (less any IRA distributions) in excess of $250,000.

(2) The Clean Heating Fuel Credit for bioheat has been reinstated.

(3) The federal deduction for Domestic Production Activities under Internal Revenue Code Section 199 must be added back to federal AGI in calculating New York AGI.

(4) A new subtraction is available for military pay included in federal AGI received for active service as a member of the Armed Services of the US in an area designated as a Combat Zone.
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TTFN

4 comments:

Unknown said...

the following link is dead

http://www.state.nj.us/treasury/taxation/pdf/other_forms/ptr/07increaseincome.pdf

it was realting to the increased PTR limits

Robert D Flach said...

Nicholas-

Good catch! So it is.

Try this one -
http://www.state.nj.us/treasury/taxation/07increaseincome.shtml.

Thanks!

TWTP

alecia said...

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alecia said...

Informative post..I like this type of blogs...Thanks for sharing !!!