This past Saturday I was where I have usually been for most of the past 20+ years – in Iselin NJ at the APA Hotel (formerly Woodbridge Hilton) attending the NJ chapter of the National Association of Tax Professionals’ “Famous State Tax Seminar”.
This annual seminar is a “must attend” for any tax professional who prepares New Jersey state income, sales or payroll tax returns.
While I am retired, I still prepare returns for a few family members and long-time personal friends, and I do write a newsletter of tax planning and preparation advice, information and resources for NJ taxpayers and continue to occasionally post about NJ and NY state taxes here at THE WANDERING TAX PRO – so attending this seminar still has value for me.
Saturday was the first “in-person” presentation of this seminar since before the COVID pandemic. I was truly glad to get “back to normal”. I have always preferred in-person CPE to online webinars for a variety of reasons, and enjoyed seeing old friends from the NJ-NATP chapter administration (and, of course, Dave Steiner).
Following the traditional schedule for this offering, after a buffet breakfast (unfortunately truly very “skimpy” this year – in the past the breakfast buffets were much more “meaty”) and introductory remarks by NJ-NATP, a “keynote” speech is presented by the current head of the NJ Division of Taxation, this year again (still) Acting Director John Ficara, followed by presentations on New Jersey individual and business tax and state property tax relief program updates and occasionally other relevant state topics by NJDOT’s “Taxation University” and NY state tax updates and a review of federal tax changes by Kathryn Keane, with a buffet lunch provided at the appropriate hour (thankfully, unlike the breakfast offering, this year’s lunch buffet was excellent).
As I say each year in my review of this event, “While I appreciate Mr. Ficara’s support of NJ-NATP and his willingness to participate in the seminar, this presentation . . . is usually of little value” (to quote my review of last year’s virtual event). Again, no real value this year, although Mr. Ficaro did tell us that there will soon be substantive improvements to online access of taxpayer information – which is good news.
The “Taxation University” presenters were familiar faces, with one new addition. In addition to the usual updates, the NJ topics presented included “Helping Delinquent Taxpayers”, “Changing the Tax Treatment of LLCs” and “Making and Changing S-Corp Elections”.
Several of the items discussed by the NJ Taxation University speakers – mostly concerning business return issues and the state “BAIT and switch” scam – were of no personal value to me, so I paid little attention. But these topics were informative and relevant and certainly worth including in the seminar.
Here are some “take-aways” from the NJ update presentations –
* The new up to $10,000 deduction for a contribution to a NJBEST 529 account is available to any person who actually makes a contribution. You do not have to be the “owner” of the account, and the beneficiary of the account to which a contribution is made does not have to be a dependent. A grandparent who contributes $5,000 to a NJBEST account for a grandchild, who is not a dependent, can claim a $5,000 deduction on the 2022 NJ-1040.
* The $200,000 NJ Gross Income threshold for claiming any of the three new “New Jersey College Affordability” deductions, which includes the NJBEST contribution deduction, applies to each NJ-1040, regardless of the filing status claimed on the return. It is the same for Single, Head of Household, Married filing Joint, and Married filing Separate taxpayers. This provides a tax-saving opportunity for married couples who file separately, and could in itself be a reason for filing separate returns (this is my observation and was not mentioned in the presentation).
* Beginning in 2023 a valid federal election by a corporation to be considered a “sub-chapter S” entity automatically applies to NJ state filing. Corporations who want to be taxed as “sub-S” entities no longer have to submit a separate NJ state election.
* As usual, refunds on 2022 NJ-1040 returns will not be mailed out until March, regardless of how early the returns is submitted.
* The 2022 Property Tax Reimbursement (aka “Senior Freeze”) PTR-1 and PTR-2 applications will be mailed out, as usual, in late February. Reimbursement checks will begin to be mailed out on July 15th. The Income Limits for the 2022 applications are 2022 income = $99,735 and 2021 income = $94,178. There is, so far, no budget-balancing reduction of either year’s amount to $70,000, as had been common in the past. Qualified NJ homeowners will be able to submit 2022 PTR-1 and PTR-2 applications online via the NJDOT website, although the system for doing so has not been set up yet.
* All of the new ANCHOR program benefits (ANCHOR replaces the former NJ Homestead Benefit, which had replaced the former NJ Homestead Rebate) will be paid by a check mailed to qualifying applicants. The benefit amount will no longer be sent to the applicable municipalities and applied as a direct credit to a quarterly property tax payment. In my opinion this is not good, and in some cases could result in a federal tax issue.
* The current ANCHOR benefit applies to a NJ resident’s status on October 1, 2019, and the income threshold is based on the NJ Gross Income reported on the 2019 NJ-1040. Several past clients had emailed me to ask what their 2019 NJ Gross Income was, as this number was asked for on the application form. We were told at the seminar that it really does not matter what number you enter on the application for your 2019 NJ Gross Income as long as you actually filed a 2019 NJ-1040. If you did the state already knows your 2019 NJ Gross Income. You can enter an estimated number, or pull a number out of your hat, and the application will not be rejected or delayed.
There was really nothing new of any consequence for the basic or average 2022 IT-201 and IT-203. And most of us were already familiar with the federal tax changes for 2022 from other CPE offerings or online reporting. But Kathryn did tell us an amazing story from the 2022 NATP in-person national conference that shows the inefficiency of IRS processing of amended returns – and why it could take almost 2 years to get a refund, even if the amended return was filed electronically (thankfully the IRS pays interest).
One thing from all past in-person offerings was missing this year. There were no vendor tables. And, one more thing. The items raffled off by the chapter after lunch really had no substantive value – in the past the “prizes” were worthwhile (like free registrations to chapter or national events and tax books).
As I always say, the value of this type of seminar for a tax professional depends on the amount of relevant tax law and regulation changes that apply to current or potential clients. There were really not too many changes for 2022 returns.
But, also as always, NJ-NATP did a good job and the chapter Board and volunteers certainly deserve the usual “kudos”.
Fellow attendees – did I miss anything important?
TTFN
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