WHAT’S NEW ON 2016 STATE TAX FORMS

As 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”.

 

I 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.” 

 

I 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.

 

The changes that affect the preparation of the 2016 NJ-1040 are –

 

(1) 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 increase deal.

 

(2) The maximum employee contributions for the various state benefit funds for 2016 are:

 

·         Unemployment Insurance and Workforce Development = $138.56

·         Disability Insurance = $65.20

·         Family 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.

 

NJ 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.

 

And, according to the NJ Division of Taxation website –

 

“• Returns filed electronically may take a minimum of four weeks to validate and process.

• Returns filed on paper may take a minimum of 12 weeks to validate and process.”

 

So don’t bug your tax preparer if you haven’t received your NJ refund promptly. 

 

For 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.

 

There 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.”

 

There is a new requirement for taxpayers who use software to prepare NY state returns, which I do not do (highlight is mine) –

 

“The 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.”

 

The “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.

 

NJ 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.

 

TTFN