NEW JERSEY
separate property state

 

Military Income:  Fully taxable.  However,

Military Filing Requirement:  No, if no tax withheld a return does not have to be filed to maintain residency.

NOTE: Spouses not domiciled in New Jersey when they married the military member are not considered residents.

Military Spouse Residency Relief Act:  Transfer of the ervice member was the reason for moving to the state. Spouse maintains a domicile in a different state. Spouse intends to leave New Jersey when the service member is transferred or leaves the service. File Form NJ-165, Employee's Certificate  of Nonresidence in New Jersey, with your employer to stop future withholding of New Jersey income tax. Include copy of spousal military ID card with New Jersey return and write "MILITARY SPOUSE" at the top of the return.

Forms Used:            

Filing Status:  Same as federal return unless one of them is not a resident of New Jersey.  In that case, they may file separate returns or file jointly as nonresidents.  CAUTION:  If filing jointly, both will be treated as residents and all income taxed. 

Attach Copy of Federal Return:  Yes, if there are schedules

Not Taxed: 

Other State Tax Credit:  Available.  Attach New Jersey Schedule A and copy of other state return. 

Reciprocity StatesPennsylvania. 

 

Where to Mail:
Refunds: Tax Due:
Division of Taxation
Revenue Processing Center
PO Box 555
Trenton, NJ  08647-0555

Division of Taxation
Revenue Processing Center
PO Box 111
Trenton, NJ  08654-0111

Nonresidents:

Division of Taxation
Revenue Processing Center
PO Box 244
Trenton, NJ  08646-0244

Website:  http://www.state.nj.us/treasury/taxation/index.shtml
Military Specific Website http://www.state.nj.us/treasury/taxation/pdf/pubs/tgi-ee/git7.pdf
Forms: 1-800-323-4400 Refund Inquiry:  (609) 826-4400
General Information:  (609) 292-6400 Electronic Filing:  (609) 633-1132
Other Info:

New Jersey Division of Taxation
PO Box 240
Trenton, NJ  08695-0240

E-filing Info:  All electronically filed returns require the use of a PIN (Personal Identification Number); i.e., entry of a Federal Self-select or Practitioner PIN.  EROs are required to retained signed NJ 8879 and all documentation for three years. 
Tax Form Instructions:
Resident Instructions Non-Resident Instructions
Military Specific Publication

 

Filing Status Scenarios

1.  Taxpayer and Spouse Residents
2.  Taxpayer and Spouse Different States of Residence
3.  Taxpayer and Spouse Residents (Use also for Single Taxpayer)
4.  Taxpayer Non-Resident - Spouse Part-Year Resident
5.  Taxpayer Married or Single - Resident but Income from Other State
6.  Amended Return

 

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer) - Taxpayer and spouse are both New Jersey residents, lived at their present location all year, and one or both had income.

Main Info Screen.  New Jersey military residents can be considered nonresidents for tax purposes if they meet all of the requirements listed in Military Income above.  Therefore a non-resident New Jersey income tax return will be prepared.  This is the one instance when you will ignore red fields.  There will be no resident state income tax return that is filed for this scenario so therefore the red field under Full year resident will not go away.

New Jersey 1040NR.  A joint non-resident New Jersey income tax return is prepared.  You must complete the State of residency block, as in the example.  As New Jersey does not tax military income when stationed outside the state, the military members income is not taxable.  The only way to properly do this for New Jersey is to remove the income from Column B, Amount from New Jersey sources. New Jersey requires a statement as to why the income is exempt, so a Scratch Pad must be attached to provide this explanation. Attach the Scratch Pad to the line 14, Military pay to be excluded from column B, entry. Link to a Scratch Pad and complete the explanation like that listed in the example. (NOTE: Enter the amount of pay to be excluded as a POSITIVE number.)


Scratch Pad - Detail Sheet.  In the Type field enter a description of the income.  In the Amount column enter the military income as a positive number.

You must check the VITA / TCE box on the bottom of Page 2.

Complete all other fields and forms with red or required information.

2.  Taxpayer and Spouse - Different States of Residence - Taxpayer or spouse is a resident of New Jersey, while the other member is a resident of a different state.  A New Jersey income tax return must be prepared due to the taxpayer or spouse having New Jersey earned income.

Main Info Screen.  Filing status is the same as federal return unless one of them is not a resident of New Jersey.  In that case, they may file separate returns or file jointly as nonresidents.  For this example, the taxpayer is a resident of New Jersey while the spouse is a resident of North Dakota.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

New Jersey 1040NR.  A joint non-resident New Jersey income tax return is prepared.  You must complete the State of residency block, as in the example.  As New Jersey does not tax military income when stationed outside the state, the military members income is not taxable.  The only way to properly do this for New Jersey is to remove the income from Column B, Amount from New Jersey sources. New Jersey requires a statement as to why the income is exempt, so a Scratch Pad must be attached to provide this explanation. Attach the Scratch Pad to Line 14, either directly on Column B, or if you wish, on the line 14, Military pay to be excluded from column B, entry. Add a new Link to a Scratch Pad from either location and complete the explanation like that listed in the example. (NOTE: If you attach the Scratch pad to Military pay to be excluded from column B, enter the amount of pay to be excluded as a POSITIVE number.)


Scratch Pad - Detail Sheet.  In the Type field enter a description of the income.  In the Amount column enter the military income as a positive number.

You must check the VITA / TCE box on the bottom of Page 2.

Review the remainder of the New Jersey Form 1040NR to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

3.  Taxpayer and Spouse Non-Residents - Taxpayer and spouse are residents of a different state.  The spouse and taxpayer must file a New Jersey tax return due to one or both having New Jersey earned income.

Main Info Screen.  If both members are residents of another state, the parties should file as nonresidents.  For this example, the taxpayer and spouse are both residents of Wisconsin but must file a New Jersey income tax return because the spouse worked in New Jersey.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

New Jersey Form 1040NR.   A joint non-resident New Jersey income tax return should be prepared.  You must complete the State of residency block, as in the example. 

To comply with the provisions of the Service Members Civil Relief Act, the military member's non-resident income must be taken off of the New Jersey 1040NR.  You must subtract the Active Duty military pay from line 14.  New Jersey requires an explanation as to why the income is excluded. The best way to accomplish this for New Jersey is to Link on line 14, Military pay to be excluded from column A, and add a new link to a Scratch Pad. Provide an explanation as shown in the example.

Scratch Pad - Detail Sheet.  In the Type field enter a description of the income.  In the Amount column enter the nonresident military income as shown in the example.

To comply with the Military Spouse Residency Relief Act, you must remove the nonresident military spouses income from Column B. New Jersey requires an explanation as to why the income is excluded. To accomplish this, link to a separate Scratch Pad from line 14, Military pay to be excluded from column B, to remove the income of the nonresident military spouse. 

Scratch Pad - Detail Sheet.  In the Type field enter a description of the income.  In the Amount column enter the income of the nonresident military spouse as a positive number.

You must check the VITA / TCE box on the bottom of Page 2.

Review the remainder of the New Jersey Form 1040NR to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

4.  Taxpayer Non-Resident - Spouse Part-Year Resident - Taxpayer and spouse moved to or from New Jersey during the tax year.  The taxpayer is a resident of a different state.  The Spouse is a part-year resident of New Jersey.  The Spouse and taxpayer must file a New Jersey tax return due to one or both of them having New Jersey earned income and possibly income from another state.

Main Info Screen.  For this example, the taxpayer is in the military and a resident of Indiana.  The taxpayer and spouse moved from New Jersey to North Dakota during the year.  The spouse was a resident of New Jersey but is now changing their residency to North Dakota for tax purposes.  The spouse therefore was a part-year resident of both New Jersey and North Dakota and must file a New Jersey income tax return because the spouse worked in New Jersey.

Part Year Resident States Worksheet.  Review form to ensure income is split correctly for the appropriate states.

New Jersey Form 1040, Page 1.   A joint part-year resident New Jersey income tax return should be prepared.  You must complete the County/Municipality Code.  Look up codes here.   Check the "Check if VITA or TCE" box at the bottom of page 1.

New Jersey 1040 Form, Page 3.  You must complete the dates of residency questions.  This form is used to subtract out all the other-states (Indiana and North Dakota) income. 

Review the remainder of the New Jersey Form 1040, Page 1, 2, and 3 to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

5.  Married or Single Military Resident of New Jersey with Income from Another State  - Taxpayer is single.  The taxpayer must file a New Jersey tax return due to him or her having New Jersey earned income.

Main Info Screen.  For this example the taxpayer is a military member stationed in North Dakota but a resident of New Jersey.  The taxpayer had a job in North Dakota therefore having North Dakota earned income.  As New Jersey does not tax military income when stationed outside the state, the military members income is not taxable.  Therefore a non-resident New Jersey income tax return will be prepared.  This is the one instance when you will ignore red fields.  There will be no resident state income tax return that is filed for this scenario so therefore the red field under Full year resident will not go away.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.  As New Jersey does not tax military income when stationed outside the state, the military members income is not taxable.  The only way to properly do this for New Jersey is to override the military member's income on the Resident/Nonresident Worksheet to ensure all income received by the taxpayer.

New Jersey 1040NR.  A joint non-resident New Jersey income tax return is prepared.  You must complete the State of residency block, as in the example.  As New Jersey does not tax military income when stationed outside the state, the military members income is not taxable.  The only way to properly do this for New Jersey is to remove the income from Column B, Amount from New Jersey sources. New Jersey requires a statement as to why the income is exempt, so a Scratch Pad must be attached to provide this explanation. Attach the Scratch Pad to Line 14, either directly on Column B, or if you wish, on the line 14, Military pay to be excluded from column B, entry. Add a new Link to a Scratch Pad from either location and complete the explanation like that listed in the example. (NOTE: If you attach the Scratch pad to Military pay to be excluded from column B, enter the amount of pay to be excluded as a POSITIVE number.)


Scratch Pad - Detail Sheet.  In the Type field enter a description of the income.  In the Amount column enter the military income as a positive number.

You must check the VITA / TCE box on the bottom of Page 2.

Complete all other fields and forms with red or required information.

6.  Amended Return  - An amended New Jersey return must be filed because the taxpayer received new tax information after their New Jersey return was filed.
Federal 1040X Form.  Before making any changes to the tax return add the US 1040X form to the tax return.  You must check the box under Income and Deductions to lock in the entries in Column A - Original amount or as previously adjusted.

Make whatever changes are required to the federal tax return.  For this example, a new W-2 was received.

New Jersey 1040NR - Nonresident Individual Income Tax.  To amend a New Jersey Nonresident return use the original 1040NR that was filed, make the changes that are required, and write "AMENDED RETURN" across the top of it before submitting. (NOTE: To amend a New Jersey RESIDENT return, add and use the NJ 1040X.)

Amended returns can not be e-filed.  The taxpayer must mail the federal 1040X and any state amended returns if required to be filed.