What are the New Jersey Individual Tax Law Changes for 2009?
Here are some of the latest New Jersey Individual Income Tax law changes for the tax year 2009 as shown below;
1. Increased Income Tax Rates for Income Over $400,000.
The New Jersey gross income tax rates for tax year 2009 increased for income greater than $400,000 as follows:
a.the tax rate increased to 8% on income over $400,000 but not over $500,000;
b.the tax rate increased to 10.25% on income over $500,000 but not over $1,000,000;
c.the tax rate increased to 10.75% for income over $1,000,000.
According to NJ Division of Taxation, this is a one-year increase and it is expected that the tax rates are expected to revert to 2008 rates on January 1, 2010.
2. Property Tax Deduction/Credit
For tax year 2009, homeowners under 65 years of age and not blind or disabled whose New Jersey gross income is more than $250,000 are not eligible for the property tax deduction. In addition, for homeowners under 65 years of age and not blind or disabled whose New Jersey gross income is over $150,000 but not over $250,000, the maximum deduction is limited to $5,000.
Homeowners who are not eligible for a deduction because their income is over $250,000 can receive a property tax credit if they satisfy the other eligibility requirements.
3. New Jersey Lottery Prizes Over $10,000 Taxable
According to NJ Division of Taxation, beginning January 1, 2009, New Jersey Lottery winnings from prize amounts exceeding $10,000 are taxable for New Jersey gross income tax purposes. The individual prize amount, not the total amount of New Jersey Lottery winnings over the year, determines taxability. Taxpayers may deduct gambling losses from their winnings that occurred during the same year. In addition, New Jersey Lottery losses can be used to offset other gambling winnings.
4. Earned Income Tax Credit
For tax year 2009 and thereafter, the amount of the New Jersey Earned Income Tax Credit “will be equal to 25% of the applicant’s Federal earned income tax credit.”
5. Commuter Transportation Benefits
The maximum commuter transportation benefit for 2009 is to $2,540.
6. Family Leave Insurance
Beginning January 1, 2009, employers are required to withhold contributions for family leave insurance. The maximum contribution for 2009 was $26.01. Excess family leave insurance contributions cannot be claimed as a credit on the 2009 Form NJ-1040. Taxpayers who contributed more than the maximum amount must write to: Division of Employer Accounts, Worker Refund Unit “2009,” PO Box 910, Trenton NJ 08625-0910, or call the Department of Labor and Workforce Development at 609-633-6400; 609-633-6400 for more information.
7. Property Tax Reimbursement
The Property Tax Reimbursement (PTR) Program reimburses eligible senior citizens or disabled persons for property tax increases. Eligible residents must file a 2009 Property Tax Reimbursement Application (Form PTR-1 or PTR-2) by June 1, 2010. The 2009 PTR applications are expected to be mailed in mid to late February. With very few exceptions, all income received during the year, including income which is not required to be reported on Form NJ-1040, must be taken into account to determine eligibility for the property tax reimbursement. For residents applying for reimbursements for tax year 2009, total annual income must be:
For 2009: $80,000 or less, and
For 2008: $70,000 or less
These limits apply regardless of marital/civil union status. However, if an applicant’s status is married/CU couple, combined income of both spouses/CU partners must be reported.