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New
Jersey Gross Income Tax
Every resident individual, even if a
minor, is required to file a NJ Gross Income Tax Return
if gross income received during the taxable year is more
than $7,500 ($3,750 for a married person or civil union partner filing separately).
If an individual was a full year resident and had gross
income of $7,500 or less, there would be no tax liability.
However, a NJ Income Tax Form (NJ-1040) must be filed in
order to obtain a refund of taxes withheld or estimated
taxes paid. The NJ-1040 must be filed between January and
April 15 for the previous tax year, unless you have requested
an extension of time to file an income tax return.
Tax legislation enacted in 2005 authorizes the implementation of a multistate reciprocal personal income tax set-off program. This program allows the withholding of another state's tax claims from New Jersey gross income tax refunds if the other state withholds New Jersey gross income tax claims from its personal income tax refunds.
Gross income includes all income EXCEPT: federal social security benefits; railroad retirement benefits (Tier I and Tier II); life insurance proceeds received because of a person's death; portion of pensions and annuities, under certain conditions; employee's death benefits; permanent and total disability, including VA benefits; gifts and inheritances; qualifying scholarship or fellowship grants; New Jersey lottery winnings; unemployment compensation; homestead rebates; income tax refunds (NJ, federal and other jurisdictions); employer and employee contributions to 401 (K) salary thrift savings plans; certain distributions from qualified investment funds; direct payments and benefits received under homeless persons assistance programs; welfare; child support.
For more information on exemptions and deductions in calculating
taxable income, please contact the Division of Taxation, NJ Department of the Treasury, 50 Barrack Street, PO Box
269, Trenton, NJ 08646-0269, telephone 1-877-225-1312,
1-800-323-4400 (pre-recorded
information) or 609-292-6400.
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Income
Exclusions
Pension
Exclusion - The New Jersey gross income tax pension and other retirement income exclusions for certain taxpayers has been eliminated. The exclusion remains available for taxpayers that have gross income of not more than $100,000.
Other
Retirement Income Exclusion - If you and/or your spouse
or civil union partner are 62 years of age or older you may be entitled to exclude
other retirement income on Line 28 of your NJ-1040. Complete
the Other Retirement Income Exclusion Worksheet in your
NJ-1040 instruction booklet to determine if you quality
for any additional exclusion.
Exclusion
of Gain on Sale of Home - If you are age 55 or over
and you sell your principal place of residence, you may
be entitled to a once in a lifetime exclusion of up to $125,000
($62,500 in the case of married individuals or civil union partners filing separately)
of the capital gain on your New Jersey income tax return,
provided that you owned your home and resided in it for
three of the five years before the sale.
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Property Tax
Homestead Credit/Rebate Program
The eligibility for and the granting of Homeowner and Tenant Rebates are subject to the approval of the state budget.
The Homestead Credit/Rebate Program reduces the amount of taxable income (credit reduces amount of tax due) for eligible homeowners and tenants who pay property taxes directly or through rent. The income eligibility limits have been reduced from last year’s levels and rebate amounts for these residents may also be affected depending on income.
The homestead property tax credit/rebate is in addition to the State’s other property tax relief programs. You can still apply for and receive benefits under those programs if you qualify.
You are eligible for a homestead credit/rebate if you meet the following conditions:
- You must have been domiciled and maintained a principal residence as a homeowner or tenant in New Jersey on October 2008; and
- Your gross income for the entire year must meet the income guidelines; and
- Your principal residence must be subject to local property taxes, and property taxes must have been paid on that residence; and
- Your principal residence is a full living unit with its own separate kitchen and bathroom.
Tenants living in dwellings which are not subject to local property tax are not eligible for the rebate.
For further information on any of the aforementioned, please contact the Division of Taxation, NJ Department of the Treasury, 50 Barrack Street, PO Box 266, Trenton, NJ 08646‑0266, telephone toll-free 1-888-238-1233 or 609-292-6400.
Senior
Citizens/Disabled Property Tax Deduction
If
you are a property owner in New Jersey, you may be entitled
to an annual property tax deduction of up to $250. To qualify,
you must be age 65 or older (less than 65 if permanently
and totally disabled), or a qualified surviving spouse or civil union partner (age
55 or older and not remarried or recommitted), and meet the following conditions:
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You are a legal resident of New Jersey for at least one
year prior to October 1st;
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You reside in and own the dwelling claimed; OR you reside
in and own the dwelling which is assessed as real property;
OR you reside as a tenant shareholder in a cooperative
or mutual housing corporation; and it is your principal
place of residence;
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Your income, exclusive of Social Security (or similar
governmental pension, disability and retirement program) does not exceed $10,000
during the year for which the deduction is granted;
-
You are a surviving spouse or civil union partner 55 or more years of age before
December 31st of the previous year, and were 55 or more
years of age at the time of the death of the decedent
and have not remarried or recommitted.
To
find out if you qualify for the tax deduction, please contact
your Municipal Tax Assessor.
For additional information, please contact the Division of Taxation, NJ Department of the Treasury, 50 Barrack
Street,
PO Box 269, Trenton, NJ 08646-0269, telephone 1-877-225-1312,
1-800-323-4400 (prerecorded information) or 609-292-6400.
Property Tax Reimbursement Program (Senior Freeze)
The Property Tax Reimbursement Program reimburses eligible senior citizens and disabled persons for property tax increases. The amount of the reimbursement is the difference between the amount of property taxes that were due and paid in the "base year" (the first year that you met all the eligibility requirements) and the amount due and paid in the current year for which you are claiming the reimbursement, provided the amount paid in the current year was greater. You must meet all the eligibility requirements for the base year and for each succeeding year, up to and including the current year to qualify for the reimbursement.
You are eligible if you meet the following requirements:
- You are age 65 or older or receiving Federal Social Security disability benefits; and
- You have lived in New Jersey continuously for at least the last 10 years, as either a homeowner or a renter; and
- You have owned and lived in your home (or have leased a site in a mobile home park on which you have placed a manufactured or mobile home that you own) for at least the last 3 years; and
- You have paid the full amount of property taxes (or site fees if you are a mobile home owner) that were due on your home for the base year and for each succeeding year, up to and including the year for which you are claiming the reimbursement; and
- You meet the income limits for the base year and for each succeeding year, up to and including the year for which you are claiming the reimbursement; and
- You file the application by the specified date.
- Income eligibility limits for the Property Tax Reimbursement Program (Senior Freeze) have been increased. As a result, you may be eligible for a reimbursement even if you were not eligible in prior years because your income was above the previous limits.
For information about the Homestead Property Tax Reimbursement Program (Senior Freeze) please call 1-800-882-6597.
Veteran's
Deduction
Veterans who were honorably discharged or released under honorable
conditions from active service during a time of war may
claim real estate tax deductions of $250 annually on homes
they own and occupy in New Jersey. A surviving spouse or civil union partner is also entitled to the deduction as long as the widow, widower or civil union partner does not remarry or recommit. If both husband and wife or civil union partner are veterans, each may claim the deduction for a total of $500 annually. There are no income limitations for the Veteran's Deduction.
Under certain conditions, permanently and totally disabled war
veterans or their surviving spouse or civil union partner may be granted a full
property tax exemption on their dwelling house and lot.
An application for the deduction must be filed in duplicate
with the Municipal Tax Assessor on or before December 31
of the pre-tax year. Once the claim has been filed and allowed
by the Municipal Tax Assessor, it will continue in force
from year to year without the necessity for further claim
so long as the claimant is entitled to a veteran's deduction.
To determine if you qualify for the Veteran's Property Tax
Deduction, or to obtain the necessary form, please contact
your Municipal Tax Assessor.
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Realty
Transfer Fee
Partial Exemption - If you
are age 62 or older, or blind or disabled, you may be entitled
to partial exemption on your New Jersey Realty Transfer
Fee when you sell your principal place of residence (one-or
two-family residential dwelling only). Where the value of
the deed is more than $350,000, an additional general purpose
fee and other changes in fees and clarifications in the
provisions governing realty transfer fees may be applicable.
To obtain the proper form, contact your Municipal Tax Assessor,
or contact the Local Property Tax Branch, Division of Taxation,
NJ Department of the Treasury, 50 Barrack Street, Trenton,
NJ 08646-0269, telephone 609-292-1793.
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Inheritance
Tax
Transfers
of Property
Any
property inherited from a spouse or civil union partner is not subject to inheritance tax. Inheritance tax
on transfers of property to a decedent's parent(s), grandparent(s),
child(ren) or grandchild(ren) has also been phased out.
For the brothers, sisters, daughters-in-law and sons-in-law
of a decedent, the first
$25,000 of property received is exempt. For transfers of
property to any other individual, there is no tax for transfers
under $500.
Bank
Accounts
Funds belonging to or held in the name of the decedent which are deposited in financial institutions, and which are payable at death to the surviving spouse or civil union partner, parent(s), grandparent(s), child(ren) or grand child(ren), may be transferred without prior clearance from the Division of Taxation. If, however,
there is real estate in the decedent's name alone, clearance
for transfer must still be obtained from the Division of Taxation.
Safe
Deposit Boxes
Safe deposit boxes are no longer inventoried by the New Jersey Division of Taxation. On January 12, 2007, the Division reissued a blanket release from the Director, Division of Taxation, to all banking institutions, safe deposit companies, trust companies, and other institutions which serve as custodians of safe deposit boxes. The contents of the boxes may be released without inspection by the Division.
For further information, please contact the Inheritance Tax Branch, Division of Taxation, NJ Department of the Treasury, PO Box 249, Trenton, NJ 08646-0249, telephone 609-292-5033.
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Division of Aging and Community Services
