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2011 Volunteer Tax Preparation. NJ Division of Taxation www.njtaxation.org. Important Contact Information. Regional Information Centers Customer Service Center 609/292-6400 Division of Revenue E-File Unit 609/633-1132 Training & Outreach [email protected]

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2011 volunteer tax preparation

2011Volunteer Tax Preparation

NJ Division of Taxation


important contact information
Important Contact Information

Regional Information Centers

Customer Service Center


Division of Revenue E-File Unit


Training & Outreach

[email protected]


new for 2011
New for 2011

Emancipation Day!!!

Returns due April 17th, 2012

Charitable Contributions

One new charity

New Jersey Lung Cancer Research Fund


Roth IRA Conversions done in 2010

2011/2012 Tax Reporting

Form NJ-1040-H

Property Tax Credit

No Tenant Rebate Application

Suspended by the State Budget

Form 1099-G no longer mailed

important processing information
Important Processing Information

Do not staple, clip or otherwise attach pages together

Place only 1 return for each envelope

You may not report a loss on Form NJ-1040

Leave unused lines ‘Blank’

form nj 1040

Form NJ-1040

Identifying Information

Page 1

civil union domestic partner
Civil Union / Domestic Partner

Civil Union Couples – Filing Status

“Married” under NJ Law

IRS does not recognize CU’s

Domestic Partner – Exemption

Not Married

Line 6 Exemption may apply

If partner does not file NJ-1040

line 11 dependents attending college
Line 11: Dependents Attending College

Must be a dependent

Line 9 or 10

Full-time College Student

Defined by Institution

Under age 22

For Entire Tax Year

form nj 10401

Form NJ-1040

Reportable Income

Page 2

tax exempt income
Tax-Exempt Income

Social Security

Unemployment Compensation

Debt Cancellation – Form 1099-C

Military Pensions

Refer to page 21

wages line 14
Wages (Line 14)

Use W-2 Box 16, ‘State Wages’

State wages often differ from Federal wages (Box 1)

All W-2s received must be included with the NJ-1040

tax exempt interest line 15b
Tax-Exempt Interest (Line 15b)

Obligations of the State of New Jersey and/or any of its political subdivisions

Direct Federal Obligations

Pub GIT-5, Exempt Obligations

Refer to page 23

Must enclose an itemized schedule if line 15b is over $10,000

net profits from business line 17
Net Profits from Business (Line 17)

Federal Schedule C

Use Federal Expenses and Deduction

100% Meal/Entertainment Deduction

Line 17 ‘Blank’ if Net Loss

See page 23, NJ Instruction Booklet

retirement plans
Retirement Plans



fully taxable

three year rule general rule
Three-Year Rule / General Rule

NJ accounting methods

No ‘Simplified’ Method

Client needs Contribution Records

Often varies from Federal Treatment

three year rule
Three-Year Rule

If employee contributions recovered within 36 months of date of first pension payment

Pension income is not reported until contributions are recovered

IRS no longer allows three year rule

general rule
General Rule

Percentage is used based on proportionate share of Contributions to Total Value of the Pension

This is applied each year to the Pension amount received

Use Worksheet A, pg 24, to determine which pension method to use

2010 conversions to roth
2010 Conversions to Roth
  • NJ Following the IRS
      • Deferred until 2011-2012
  • NJ/Fed reporting must be the same
ira withdrawals
IRA Withdrawals

Use Worksheet C, Page 26

Client Record Keeping

IRA Contributions

Prior Year Worksheet C

Roth Distributions

Exempt if ‘Qualified’ – page 27

taxable pension line 19
Taxable Pension (Line 19)

Line 19 is for the total of:

Taxable Pensions (after reduction by Three-year or General Rule)

Taxable Annuities

Taxable IRAs

gambling winnings line 23
Gambling Winnings (Line 23)

Include Casino and Track Betting

Include NJ Lottery Winnings

Only with prizes exceeding $10,000

Substantiated Losses

Can be used to Net total winnings

record keeping losses
Record Keeping - Losses

Substantiated through:

Daily log


Canceled check

Losing race track pari-mutuel tickets

Losing Lottery Tickets

pension exclusion line 27a
Pension Exclusion (Line 27a)


Age 62/older or Disabled

Total income of $100,000 or less

Amounts Based on Filing Status

$20,000 – MFJ/HOH/Widow

$15,000 – Single

$10,000 - MFS

retirement exclusion line 27b
Retirement Exclusion (Line 27b)

Taxpayer may deduct unused Pension

Exclusion from Line 27a if:

Line 14 ___

Line 17 ___

Line 20 ___

Line 21 ___

Total less than $3,000

Earned Income

gross income line 28
Gross Income (Line 28)

No Filing Required if:

$10,000 or less


Married/CU - Filing Separate

$20,000 or less

Married/CU Filing Joint

Head of Household

Qualifying widower

medical expenses line 30
Medical Expenses (Line 30)

Unreimbursed medical expenses

Include MSA Contributions (Archer)

Expenses in excess of 2% of line 28 Gross Income

Worksheet E, Page 31

property tax deduction credit
Property Tax Deduction/Credit

Enter total property taxes paid (or 18% rent) on line 36a

Include Homestead Benefit received as a credit

PTR applicants – use base year amount

Residency Status – Line 36b


property tax deduction credit1
Property Tax Deduction/Credit

Worksheet F

determines the greater benefit

Deduction Limited to $10,000

$5,000 MFS

Enter Property Taxes Paid on Line 36cor a flat $50 credit on Line 48

tax line 38
Tax (Line 38)

Show NJ Tax amount based on taxable income

Tax Tables (Pg 53)

Tax Rates (Pg 62)

form nj 10402

Form NJ-1040

Calculating Tax and Payments

Page 3

credit for taxes paid line 40
Credit for Taxes Paid (Line 40)

Used for NJ Residents who have income subject to tax out of the state

Schedule A must be completed

Note: Income must be reported on the NJ-1040

use tax line 44
Use Tax (Line 44)

Purchases out of state

No NJ Sales Tax

Estimated Use Tax Chart (pg 39)

Absent of Purchase Records

Enter 0.00 if no Use Tax is due

nj income tax withheld line 47
NJ Income Tax Withheld (Line 47)

Form W-2, Box 17 (State Income Tax Withheld)

Form 1099-R (Pensions, etc)

Include amounts from all W-2s & 1099s received

Note: Be sure W-2, Box 15 Shows ‘NJ’

earned income tax credit line 50
Earned Income Tax Credit (Line 50)


All NJ Residents who qualify for Federal EITC are eligible to apply – subject to review

Calculated Amount

20% of Federal EIC amount

excess ui di fli lines 51 53
Excess UI/DI/FLI (Lines 51 - 53)

For people with:

Multiple employers

Multiple W-2s

With excess UI/DI/FLI contributions

Must complete and include Form NJ-2450 with NJ-1040

underpaid or overpaid
Underpaid or Overpaid

Compare Total Payments (Line 54) to Total Tax (Line 46)

If Line 54 is greater than line 46, the difference is an overpayment

If Line 54 is less than line 46, the difference is due to the state

refund amount line 65
Refund Amount (Line 65)

Overpayments can be:

Left as a credit for next year;

Donated (all or in part) to various charitable designations; or

Refunded to the Taxpayer

Be sure to include requested refund amount on Line 65

part year residents
Part-Year Residents

Resident only Part of the Tax Year

Complete ‘Residency Status’

Page 1, Form NJ-1040

Allocate Income

Just NJ Residency Period

Pro-Rate Exemptions and Deductions

by Number of Months in NJ

property tax relief programs
Property Tax Relief Programs

Form NJ-1040-H

Certain filers only

Homestead Benefit

Only Homeowners

Property Tax Reimbursement

Homeowners/Mobile Home Owners

form nj 1040 h
Form NJ-1040-H

Property Tax Credit ($50)

Age 65/Ovr or Disabled

No NJ Income Tax Return Filed

Under Filing Threshold

Did not own Residence on 10/1/11

homestead benefit
Homestead Benefit

Owned/Occupied Residence

On 10/1/11

Gross Income Under – regardless of filing status

$150,000 – 65/Ovr or Disabled

$75,000 – Everyone else

Paid as Direct Property Tax Credit

No Tenant Rebate Application

Suspended by the State Budget

ptr eligibility
PTR - Eligibility

Must be Age 65/ovr or Disabled by 12/31/2010

NJ Resident for at least 10yrs

Owned and lived in the home for at least 3 years

Have fully paid property taxes due

by June 1st of following year

property tax reimbursement
Property Tax Reimbursement

Income Eligibility Limits


Single/Married $80,000


Single/Married $80,000

ptr income limits
PTR – Income Limits

Virtually all gross income is included for PTR eligibility

Social Security


Military Pension

NJ Lottery Winnings

This will often vary from the income tax form

ptr first time filers
PTR – First Time Filers

Form PTR-1 – available online

Establishes 2010 and 2011 Eligibility

Reserves Base Year at 2010 Level

Difference of 2011 & 2010 Taxes

Proof of Property Taxes must be included with all PTR applications

ptr 2 nd and later years
PTR – 2nd and Later Years

File Form PTR-2

Comes Pre-Printed with Base Year

Verifies 2011 Eligibility

Difference of 2011 and Base Year

Proof of Property Taxes must be included with all PTR applications

budgetary approval
Budgetary Approval

All Property Tax Relief Benefits are Subject to Change

NJ FY 2013 Budget

Passed by June 30th, 2012

property tax relief assistance
Property Tax Relief Assistance…

Homestead Benefit


Property Tax Reimbursement


NJ Tax Hotline