1. New Jersey Slides Tax Year 2018
Other Income
New Jersey Slides
Tax Year 2018

2. Other Income – NJ Topics
NJ topics to be discussed
NJ Gambling Income
NJ Property Tax Recoveries
Cancellation of Credit Card Debt
NTTC Training – TY2018

3. NJ Gambling Income
Losses are deducted from winnings before reporting the net on NJ 1040 Line 24
NJ Lottery winnings of $10,000 or less per occurrence are not taxable in NJ; anything above $10,000, total amount is taxable
Lottery winnings from other states are fully taxable
Winnings/losses entered into the W-2G screen of the Federal return will automatically flow through from Federal to NJ return
Capture gambling information in NJ Checklist Income Subject to Tax section for later entry in the TaxSlayer State section
NTTC Training – TY2018

4. Property Tax Recoveries
Process for handling property tax rebates received in current tax year for property taxes paid in a previous year
Includes Property Tax Reimbursement (PTR) and HB
Rebate is considered a recovery if taxpayer received a tax benefit in the prior year by claiming property taxes as an itemized deduction on Schedule A line 6
PTR – taxpayer itemized last year
HB – taxpayer itemized 3 years ago
NJ AARP TaxAide State Meeting 2018

5. NJ AARP TaxAide State Meeting 2018
Is Rebate a Recovery?
If no recovery because taxpayer did not itemize in appropriate prior year, then ignore rebates received
If rebate is a recovery, then must determine taxable amount and declare it as Other Income on new Schedule 1 line NEW
PTR - use State Tax Refund Worksheet to determine taxable amount
HB – cannot use State Tax Refund Worksheet for taxes paid 3 years ago, so whole HB is taxable
NJ AARP TaxAide State Meeting 2018

6. Why Change in Process from Last Year?
Last year, we first tried to net the recovery amount against current year property taxes on Schedule A. Only if netting not possible, then declare as Other Income
Objective of netting was to reduce total itemized deductions by the amount of the taxable recoveries
This year, recommendation is not to net on Schedule A, but to declare all taxable recoveries as Other Income. Why?
NJ AARP TaxAide State Meeting 2018

7. Why Change in Process from Last Year? (cont’d)
Under new tax law, most of our taxpayers will claim standard deduction in 2018 and not itemize. Therefore, cannot net on Schedule A
Under new tax law for Schedule A, the total of state income tax/sales tax (line 5) + property taxes (line 6) is capped at $10,000. Becomes extremely difficult to calculate the correct amount of net property tax to declare that will reduce total itemized deductions by the amount of the taxable recoveries
NJ AARP TaxAide State Meeting 2018

8. Cancellation of Credit Card Debt
1099-C income is not taxable in NJ
TaxSlayer automatically excludes cancellation of debt income from NJ Other Income
NTTC Training – TY2018