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Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
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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: 7 years ago.
Category: Tax
Expert:  Bill replied 7 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.


See page 27 -



Customer: replied 7 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 7 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 -


Edited by Bill on 12/23/2009 at 6:07 PM EST
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