Nj state income tax
General information: All individuals, whether they are residents, part-year residents or non-residents, who receive income from New Jersey sources in the tax year are required to file a New jersey income tax return.A full-year resident must report income from all sources which are taxable by the New Jersey state.Residents with a gross income in excess of $10,000 and who files single or married filing separately, are required to file a return.Taxpayers filing jointly, as a head of a family, or as a widow or widower, must file a return if they receive income up to or in excess of $20,000.part-year residents whose income for the year is more than the minimum amount taxable, must pay tax for the income they received from New Jersey when they where in the state.This rule applies for the non residents as well.
You should file a NJ return if you are eligible for a refund on the New Jersey estimated tax that you paid, or in the event when New Jersey income tax was withheld from your salary.It is also necessary for you to file a return for receiving credit or refund even if your income falls below the minimum amount taxable.
Filing requirements for different categories:
- Non residents: All non residents who receive income from New Jersey sources and whose total income exceeds the filing threshold of $20,000 should file a NJ return.
- Pennsylvania residents: those PA residents who receive compensation from NJ sources need not pay any NJ income tax.According to the PA/NJ reciprocal personal income tax agreement, it is not required that a NJ employer should withhold NJ income tax from the compensation paid to its PA resident employees who file form NJ-165.This rule applies for compensations only which include earnings like wages, tips and fees.Other income such as the money received by selling of a property is taxable.
- Military personnel: If your legal residence is in NJ, you are required to file a return.You will be considered a non resident and will not be imposed a tax, if you didnt have a permanent address in New Jersey during the taxable year, while you had one outside the state; and you spent 30 days or less of the taxable year in NJ.
- Deceased taxpayers: A return is to be filed on behalf of a deceased tax payer, if he was required to file one, by the surviving spouse, executor or an appointed administrator.If you were eligible for the income that the deceased person would have been rightful to if he were alive and if it was not included in his/her final return, you must report the same, when you receive it, when you file your own return.
Incomes that are not taxable: Incomes such as the following are not imposed any tax and thus there is no need to file a return for them as well.
- Unemployment compensation
- Compensation to workers
- Social security benefits provided by the federal government
- Disability benefits
- Gifts and inherited property or wealth
- Winnings from state sponsored lotteries
- Donation or help in the form of charity
- Federal and New Jersey tax refunds.
Deductions allowed: Deductions are allowed for selected healthcare expenses, donations made for the Medical Savings Account (MSA), health care plan expenses for the self-employed, alimony, and the amount subtracted on your return as the health enterprise zone deduction.Deductions on federal income tax such as the interest on mortgage, expenses incurred in business, and contributions made towards IRA and Keogh plan are not deductible on the New Jersey return.
Estimated Payments: All resident and non-resident taxpayers who expect their balance to be in excess of $400 should pay their estimated amount of tax.The filing of the estimated tax is to be done before the 15th of April, June, September and January, or on the next working day, if the due date falls happens to be a Saturday, Sunday, or a holiday.
If the tax balance due exceeds $400, interest charges will be levied on the underpayment even if the tax payment is done on time.Interest is calculated at an annual rate of 3% more than the prime rate.
Mode of payment: The payment of income taxes could be done through money order, credit card or by electronic check facility which is available on the tax divisions official website.Those who dont have internet access can avail the facility by contacting the customer service center.
Filing of extension: You may apply for an extension for the date of filing, in the event of you being unable to file within the due date.You should do this before midnight on April 17th if you pay online, or you may mail the printed Form NJ-630 to reach before the midnight of April 17.
Penalties and interests: A late filing penalty of 5% of the monthly tax due will be imposed in case of late payments, the maximum penalty being 25%.A penalty of $100 per month may also be charged by the NJ tax division.
Interest is computed as a compound interest at a yearly rate of 3% in excess of the prime rate for every month or the fraction of a month for which the tax is not paid.Also, a referral cost recovery fee of 10% of the amount of tax due will be made as a part of the liability.
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