Friday, January 19, 2018

WHAT'S NEW ON THE 2017 NJ-1040

While the actual 2017 NJ-1040 is not yet available at the NJDOT website, the 2017 Instruction Booklet and just about all other 2017 forms and schedules can now be accessed there.

Based on the instructions there appears to be only one change to the composition of the actual NJ-1040 form.  In the section for exemptions a new Line 12 (c) has been added for the new $3,000 Veteran’s Exemption.  The appropriate amount – $3,000 if the taxpayer or a spouse qualifies, or $6,000 if both spouses qualify – is included in the deduction on Line 29 for exemptions.

A taxpayer who is “a veteran honorably discharged or 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” by the last day of 2017 is eligible for a $3,000 exemption on his or her NJ state income tax return.  This exemption is in addition to any other exemptions the taxpayer is entitled to claim and is available on both resident and nonresident returns. The exemption can be claimed by both spouses on a joint return if they qualify, but the exemption cannot be claimed for a domestic partner or dependents.

You must provide a copy of Form DD-214, Certificate of Release or Discharge from Active Duty, or other appropriate documentation, such as a Form DD-256 or a driver’s license with veteran status, which is a license which has the word “VETERAN” on it.   the first year you claim the exemption. This form does not need to be provided in subsequent years.  The United States National Archives and Records Administration can assist with obtaining a copy of your DD-214.

You can certify for the exemption in advance by sending a copy of your DD-214 and a Veteran Exemption Submission Form to the Division before you file, which may help process your return faster.

Mail a copy of your DD-214 and the submission form to The New Jersey Division of Taxation, Veteran Exemption, PO Box 440, Trenton, NJ 08646-0440 or fax your DD-214 and the submission form to 609-633-8427.

If you do not pre-certify before you will need include a copy of your DD-214 or other acceptable documentation with the filing of your NJ state return.

Back to the NJ-1040 – the only other change is there is a new fund to which you can contribute a portion of your refund on Line 64 – the New Jersey Yellow Ribbon Fund (Code = 23).    

One thing that I was unsure about prior to seeing the 2017 instructions concerned the “Other Retirement Income Exclusion”.  I was not sure that this was available up to the new increased basic “Retirement Income Exclusion” amounts, or if it remained at the old limits.  The instructions clarify that the increased Retirement Income Exclusion amounts – now $30,000 for Single and Head of Household filers, $40,000 for Married, or “Civil Union” couple, Filing Joint Return filers, and $20,000 for Separate filers, twice what it was on the 2016 NJ-1040 – also apply to the "Other Retirement Income Exclusion"

The introductory letter from NJDOT Acting Director John Ficara in the 2017 instruction booklet says -

The pension and/or other retirement income exclusion amount is being increased over a four-year period. This year, you may be eligible for an exclusion of up to $40,000.”

And the “Worksheet D: Other Retirement Income Exclusion” shows the new increased Retirement Income Exclusion amounts in the calculation.

So even if you have absolutely no pension income, if you, and/or your spouse or civil union partner, were 62 or older on December 31, 2017, your gross income on Line 26 is $100,000 or less, and your total income from wages, self-employment, partnerships, and sub-S corporations is $3,000 or less, you do not have to pay any NJ Gross Income Tax if your NJ income, before deductions, is $30,000, $40,000, or $20,000 or less, depending on your filing status.

No other changes that I can see.  When the actual 2017 NJ-1040 is available I will review it and let you know if there are any more changes.


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