Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.
Wednesday, January 25, 2017
WHAT’S NEW ON 2016 STATE TAX FORMS
I previously mentioned in an introduction to an earlier BUZZ installment there
is no change to the 2016 Form 1040, or 1040A.They are “line-for-line, exactly
the same as the 2015 Form 1040, except for the changes in the standard
deduction and personal exemption amounts”.
was waiting to see the 2016 Form NJ-1040 instructions to find out when the new
$3,000 exemption for veterans became effective.The answer was recently provided in an announcement on the NJDOT website
“Under a new State law, veterans may qualify
for an exemption of up to $3,000 on their New Jersey tax return for income
earned in 2017. This exemption, part of a bill passed by the Legislature and
signed into law by Governor Christie last October, is in addition to other
exemptions or deductions for which veterans may qualify. The exemption is
available for all veterans who received honorable discharges or who were
released under honorable circumstances from active duty in the Armed Forces of
the United States, a reserve component thereof, or the National Guard of New
Jersey in a federal active duty status. Veterans may claim the exemption when
they file their Tax Year 2017 returns. The
exemption does not apply to 2016 income.”
have finally seen the 2016 Form NJ-1040 and the one and only change to the
form, other than the year, is replacing the boxes in the bottom section of Page
1 for entering the amount of the check enclosed for the balance due (on the
2015 NJ-1040) with boxes for entering a Driver’s License Number (see
below).Otherwise it is exactly the same
as the 2015 NJ-1040.
changes that affect the preparation of the 2016 NJ-1040 are –
Residents who are eligible and file for a federal Earned Income Credit can also
receive a NJ Earned Income Credit equal to 35% of the federal amount.This increased % was part of the gas tax
The maximum employee contributions for the various state benefit funds for 2016
Insurance and Workforce Development = $138.56
Insurance = $65.20
Leave Insurance = $26.08
If you had 2 or more NJ employers
during 2016 and contributed more than these maximum amounts you can receive a
refund of the excess on the NJ-1040 via Form NJ-2450.
(3) The percentage used to calculate
the allowable “Alternative Business Calculation Adjustment” deduction on the
2016 Schedule NJ-BUS-2 (and going forward) is 50%.The ABCA deduction is now fully phased-in.
(4) The Fund for the Support of New
Jersey Nonprofit Veterans Organizations has been added to the list of charities
to which NJ taxpayers can contribute via the 2016 NJ-1040.It is identified with code number “22” on the
“Other Designated Contribution” line on the form.
taxpayers hoping for a quick refund by filing early will be out of luck.No NJ
refunds will be issued until March 1, 2017, regardless of how early the
returns have been filed.
according to the NJ Division of Taxation website –
“•Returns filed electronically may take a minimum
of four weeks to validate and process.
filed on paper may take a minimum of 12 weeks to validate and process.”
don’t bug your tax preparer if you haven’t received your NJ refund promptly.
some reason the State of New Jersey is dragging its arse – the 2016 individual
income tax forms and instructions are
not yet available to download on the NJDOT website.I was able to view the 2016 NJ-1040 and
instructions because a client received the booklet in the mail last week.
have been no changes to New York state income taxes and the 2016 New York
IT-201 or IT-203 – other than the statutory cost of living adjustments to the
Standard Deduction and the Tax Rate Schedules and some changes to obscure tax
credits.The only credit changes worth
mentioning are -
·“NYC school tax credit - Beginning with tax
year 2016, the credit will now be a New York State personal income tax credit
for residents of New York City.Previously, the credit was a New York City personal income tax credit
for residents of New York City.
·Noncustodial parent earned income
credit - This credit has been permanently extended.Previously, this credit was due to expire
December 31, 2016. See Form IT-209, Claim for Noncustodial Parent New York
State Earned Income Credit, and its instructions.”
is a new requirement for taxpayers who use software to prepare NY state returns,
which I do not do (highlight is mine) –
taxpayer’s driver license or state identification information is required. If the taxpayer and/or spouse has been
issued a driver license or state identification card, they are required to
provide that information to be entered into the software. Taxpayers must
provide the ID number, issuing state, issuing date, and expiration date for all
licenses or identification cards. If the taxpayer license/ID is a New York
State driver license or non-driver ID, the document
number found on the license/ID must also be entered. In the event that a
taxpayer does not have a driver license or state-issued ID, you will be
prompted by the software to indicate this. If the taxpayer does not have either
a driver license or state-issued ID, marking the check box indicating that they
have neither will fulfill the new requirement. We are requiring this
information as an additional means of validating the taxpayer’s identification,
and not having the information will not cause delays. However, if all other
efforts to validate the taxpayer’s identity are unsuccessful, the processing of
the refund may be delayed.”
“document number” referenced above is specific to the New York State driver’s
license and is typically found in the bottom right corner on the front, or on
the back of the license.
also asks for a driver’s license number, but it is optional.Entering
a driver’s license is not required for the processing of the NJ state return.
The 2016 New York State, and Pennsylvania,
tax forms and instructions are now available to download from the state tax agency websites, as are the 2016 federal forms
available at www.irs.gov.God only knows when the NJ forms and
instructions will be available.