Thursday, December 27, 2012
WHAT’S NEW FOR NJ INCOME TAXES FOR 2012
The 2012 NJ state income tax forms and instructions are now available at the NJ Division of Taxation website.
The big change for the 2012 NJ-1040 is the new “Alternative Business Calculation Adjustment”.
Beginning with 2012, taxpayers who have losses in the categories of -
· net profits from business,
· net gains or net income from rents, royalties, patents, and copyrights,
· distributive share of partnership income, and
· net pro rata share of S corporation income
- can use the losses to calculate an adjustment to their taxable income (“Alternative Business Calculation Adjustment”).
The percentage used to calculate the adjustment is being phased in over five years. The percentage will increase from 10 percent for tax year 2012Taxpayers can carry forward unused losses in those categories for a period of 20 years to calculate future adjustments.
Taxpayers with income and/or losses in any of these categories must complete two new return schedules: Schedule NJ-BUS-1 (Business Income Summary Schedule), and Schedule NJ-BUS-2 (Alternative Business Calculation Adjustment) to calculate the amount of their adjustment or loss carryforward.
A new Line 34 has been added to Page 2 of the NJ-1040 to enter the Alternative Business Calculation Adjustment.
I look forward to the January 2013 NJ-NATP “Famous State Tax Seminar” to learn how this new adjustment will work.
The only other changes to the NJ-1040 are –
· A new worksheet has been developed (Worksheet G, Use Tax Calculation) to make it easier for New Jersey residents to determine the amount to report on Line 45, Use Tax Due on Internet, Mail-Order, or Other Out-of-State Purchases.
· A new oval has been added below the signature line that must be filled in if a copy of a deceased taxpayer’s death certificate is enclosed with the return. This oval should be filled in and a copy of the death certificate enclosed only if there is a refund due and the check needs to be issued to the decedent’s surviving spouse/civil union partner or estate.
· Three new funds have been added to the list of organizations to which taxpayers can contribute on the New Jersey tax return – the Boys and Girls Clubs in New Jersey Fund, the NJ National Guard State Family Readiness Council Fund, and the American Red Cross-NJ Fund.
Other than that the 2012 NJ-1040 is no different than the NJ-1040 of past years.
FYI - For 2012, the maximum employee unemployment insurance/workforce development partnership fund/supplemental workforce fund contribution (SUI) was $128.78, the maximum employee disability insurance contribution (SDI) was $60.60, and the maximum employee family leave insurance contribution (FLI) was $24.24.
I was pleased to find that it appears there is no longer an income limitation for submitting a NJ-1040 online via the NJWebFile system. I should be able to submit the 2012 NJ-1040 for taxpayers with NJ Gross Incomes over $150,000 this way.