How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Bill Your Own Question
Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3152
Experience:  EA, CEBS - 35 years experience providing financial advice
6480514
Type Your Tax Question Here...
Bill is online now
A new question is answered every 9 seconds

NJ Pension exclusion I understand that in order to exclude

Resolved Question:

NJ Pension exclusion:
I understand that in order to exclude $20000 of pension income from our joint return that our NJ AGI (including pension income) must be less than $100,000.

Is the AGI for the exclusion net of any individual 401k contributions?
Submitted: 6 years ago.
Category: Tax
Expert:  Bill replied 6 years ago.

Yes, the income limitation of $100,000 excludes any 401(k) contributions you make because those amounts are subtracted from your income for both federal and state income tax purposes. Hence, the state income tax box on your W-2 will be reduced by the amount you contribute to a 401(k). The amount from this box is entered on line 14 of the NJ 1040 which is part of the taxable income amount on line 26 used to determine the eligibility for the pension exclusion on line 27a.

 

http://www.state.nj.us/treasury/taxation/pdf/other_forms/tgi-ee/2009/091040.pdf

 

See page 27 - http://www.state.nj.us/treasury/taxation/pdf/other_forms/tgi-ee/2009/091040i.pdf

 

 

Customer: replied 6 years ago.
Ok, But the 401k contributions are into (solo) Self Employed 401k plans and all income is on 1099's not W2's. I apologize for not giving all info. I will accept after your response given this info.
Thank you
Expert:  Bill replied 6 years ago.

You would deduct these contributions from your net profit on Schedule C and then enter that net amount on line 17 of form NJ-1040. Hence, the contributions will reduce your taxable income for NJ pension exclusion purposes.

 

See page 22 - http://www.state.nj.us/treasury/taxation/pdf/other_forms/tgi-ee/2009/091040i.pdf

 



Edited by Bill on 12/23/2009 at 6:07 PM EST
Bill and other Tax Specialists are ready to help you

Related Tax Questions