Thursday, December 23, 2010


The Winter 2010 edition of the “New Jersey State Tax News”, available online only at the NJ Division of Taxation website, has just been released. The top item is “What’s New for Tax Year 2010”.

I have checked and the 2010 NJ-1040 is not yet up at the DOT website. However I thought I would let you know what is new for New Jersey for 2010, as per the State Tax News item.

* Taking a cue from New York, New Jersey will no longer mail out paper 1099-Gs to report the amount of state income tax refund issued in 2010. Of course NJ will still send the information to “Sam”, who will match the info to what is reported on 1040s. Like with NY refunds, you will be able to view and print the 1099-G information somewhere at the NJ Division of Taxation website.

* The maximum property tax deduction of $10,000 was limited on the 2009 NJ-1040 based on level of income. This was a temporary provision for 2009 returns only. For 2010 the full deduction (100% of real estate taxes paid on your principal personal residence or 18% of rent paid), up to the normal $10,000 maximum, will be allowed regardless of income.

• The TR-1040, which had previously been Page 4 of the NJ-1040, is replaced by Form NJ-1040-H (Property Tax Credit Application). This form is to be used by qualifying residents eligible for the property tax credit who do not need to file a NJ-1040.

According to the item –

Filers can use Form NJ-1040-H only if they:

1. Were 65 years of ago or older, blind, or disabled on December 31, 2010, and

2. Had New Jersey gross income for 2010 of $10,000 or less ($10,000 or less if filing status is single or married/CU partner filing separate return), and

3. Have not filed and will not file a 2010 New Jersey resident income tax return, and

4. Were not a New Jersey homeowner on October 1, 2010.

That is a lot of “ands”.

Residents who meet the requirements in 1-3 of above who owned and lived in a principal residence in NJ on October 1, 2010 should not file a Form NJ-1040-H. NJ promised that “the property tax credit for these homeowners will automatically be included with their homestead benefit, provided they file a homestead benefit application”.

* The NJ Earned Income Credit is equal to 20% of the filer’s federal Earned Income Credit.

*The 2010 Form NJ-2450 has been revised to include excess Family Leave Insurance contributions – so you can now claim a refund of excess FLI contributions, along with excess SUI and SDI contributions, on the 2010 NJ-1040. You will not have to file a separate return. So Trenton will not be screwing you out of excess FLI payments as it did for 2009.

* New Jersey will follow the federal Form 1040 with regards to reporting of ROTH conversions made in 2010. If you make the federal election to report ROTH conversion income in equal amounts in 2011 and 2012 you “must report the amount that is taxable for New Jersey in equal installments in 2011 and 2012”. If you elect to report the entire amount on your 2010 Form 1040, you must also report the total amount taxable for NJ purposes on the 2010 NJ-1040.

* As I had previously reported, New Jersey will also follow the federal government on the due date of 2010 returns. “The due date is April 18, 2011, for calendar year taxpayers instead of April 15 because of the Emancipation Day holiday in the District of Columbia.”

The item also tells us that for the Property Tax Reimbursement Program (the “senior freeze”) the income threshold for 2010 is $80,000, which is the same as for 2009.

And “information about the 2010 Homestead Benefit (Rebate) Program is not yet available”.

Once the 2010 NJ-1040 and supplements are available at the NJDOT website I will check them out and report on actual changes to the form.


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