Income Tax. New Jersey Tax Updates

Transcription

1 Income Tax New Jersey Tax Updates

2 Tax Reform Basics for Individuals and Families

3 Recommend a Paycheck Checkup Some law changes in the Tax Cuts and Jobs Act may affect employee s withholding. Taxpayers can protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. Taxpayers can avoid too much withholding and receive more in their paychecks. Taxpayers who make estimated tax payments should also re-estimate their estimated taxes.

4 Income Tax Increase New Tax Rate on Income Over $5,000,000 Tax Year % Tax Rate Applies to All Filing Statuses

5 How Will This Effect Your Clients? Employee Clients Accelerated Withholding Rate for % no later than 09/01/ /31/ /01/2019 and Forward 11.8% Withholding Rate

6 How Will This Effect Your Client? Non-Employee Clients May Need to Increase Estimated Payments Estimated Payments Due Prior to 09/01/2018 No Penalty & Interest Estimated Payments 09/01/18 12/31/18 Possible Penalty & Interest

7 Changes to standard deduction and personal exemptions Standard Deduction Amount Increased Single or Married Filing Separately $12,000 Married Filing Jointly or Qualifying Widow(er) $24,000 Head of Household $18,000 Deduction for Personal and Dependent Exemptions Suspended

8 Changes to itemized deductions Limit on overall itemized deductions suspended Deduction for medical and dental expenses modified Deduction for state and local income, sales and property taxes modified Limit for charitable contributions modified

9 Changes to itemized deductions Deduction for home mortgage and home equity interest modified New dollar limit on total qualified residence loan balance

10 Changes to itemized deductions Deduction for casualty and theft losses modified Miscellaneous itemized deductions suspended includes items formerly subject to the 2% of AGI limitation such as tax return preparations fees, uniforms, union dues, and unreimbursed employee business expenses such as, vehicle expenses, meals, entertainment and travel

11 Veterans Exemption Additional $3,000 Personal Exemption Qualifications: Honorably Discharged / Released Veterans from: Active Service in Military, Reserves, or National Guard Taxpayer s Pre-Certify Once Military Personnel

12 Increase of Pension Exclusion 4 Year Phase in & After MFJ $40,000 $60,000 $80,000 $100,000 MFS $20,000 $30,000 $40,000 $50,000 Single/HOH $30,000 $45,000 $60,000 $75,000 Income Limit Remains $100,000

13 Retirement Plans Recharacterization of a Roth Conversion Plan Loans to an Employee that Leaves Employment Disaster Relief Retirement Plans

14 Property Tax Deduction Increase New for TY 2018 PTD Limit Raised to $15,000 MFS - $7,500

15 Increase of Earned Income Tax Credit 3 Year Phase in % 37% % 39% % 40% No Change to Eligibility

16 Child and Dependent Care Credit New Credit for Tax Year 2018 Nonrefundable Credit Eligibility: New Jersey Taxable Income is Under $60,000 Receiving Federal Credit Working or Actively Looking for Work Paid Expenses for Care of a Dependent

17 Child and Dependent Care Credit Credit Calculation: Maximum New Jersey Credit One Qualifying Child - $500 Two or More Qualifying Children - $1,000

18 Changes to Child Tax Credit Child Tax Credit increased to $2000 (including up to $1400 in additional child tax credit) per qualifying child New Credit for Other Dependents - up to $500 for dependents who do not qualify for the child tax credit Children must have a SSN to qualify for CTC or ACTC Due Diligence Requirement

19 Gold Star Family Counseling Credit Gold Star Family Counseling Program Free Counseling Services for Veterans and Family Members Non-Refundable Credit Mental Health Care Professionals Donating hours per year Calculated on Calendar Year TRICARE Rate Record Keeping Done by Military and Veterans Affairs

20 Wounded Warrior Caregiver Credit New For Tax Year 2018 Refundable Credit Qualified Family Caregivers Of Discharged Veterans Lesser of: $675 or 100% of Service Member s Federal Disability

21 Other Tax Reform Changes for Individuals Deduction for moving expenses suspended Alternative minimum tax (AMT) exemption amount increased Repeal of deduction for alimony payments

22 Other Tax Reform Changes for Individuals Treatment of student loans discharged on account of death or disability modified Repeal of deduction for amounts paid in exchange for college athletic event seating rights Combat zone tax benefits available to Armed Forces members who served in the Sinai Peninsula

23 ABLE Accounts and 529 Plans ABLE Accounts: Rollovers from a 529 Plan Saver s Credit now Available for Contributions Changes for People with Disabilities 529 Plans: K 12 Education

24 Form NJ-1040 New NJ-1040 Updated Format Exemptions: Lines 6-13 Income: Lines Deductions: Lines Credits: Lines 42-60

25 Form NJ-1040 New Line Items Child & Dependent Care Credit: Line 44 Gold Star Family Counseling Credit: Line 48 Wounded Warrior Caregivers Credit: Line 60 New Schedules Schedule NJ-DOP Net Gains or Income From Disposition of Property Schedule NJ-COJ Credit for Income or Wage Taxes Paid to Other Jurisdiction

26 NJ-1040 Instructions New Look Simplified Language Logical Flow

27 NJ Affordable Care Act Beginning TY 2019 Law Requires New Jersey Residents to Have Health Insurance Or Pay Tax Penalty Follows Federal Affordable Care Guidelines

28 Health Care Coverage Reporting Reminder For tax year 2018, the IRS will not consider a return complete and accurate if the taxpayer does not report full-year coverage, claim a coverage exemption, or report a shared responsibility payment on the tax return. HealthCare.gov has health insurance options that are available for taxpayers.

29 Tax Reform on IRS.gov IRS.gov/taxreform IRS.gov/getready News Releases & Fact Sheets Tax Reform Tax Tips Frequently Asked Questions YouTube Videos Subscription Services Legal Guidance

30 Thank You!

31 Thank you

32 Property Tax Relief New Jersey Tax Updates

33 Property Tax Relief Programs Homestead Benefit Homeowners Only Property Tax Reimbursement Homeowners/Mobile Home Owners

34 Homestead Benefit

35 Homestead Benefit Qualifications Qualifications Remain the Same Owned/Occupied Residence Gross Income Limits $150,000 65/Over or Disabled $75,000 Everyone Else

36 Homestead Benefit Calculation Based on: Age/Disability Status New Jersey Gross Income % of 2006 Property Taxes Percentages Reduced

37 Benefit Calculation 65/over or Disabled Everyone Else

38 Who s the Qualified Applicant? How Many Owners? Owned with a Spouse One Owner With Someone Other than a Spouse Multi-Owner Is Your Property Multi-Unit? Based on Square Footage No More than 4 Units No More than One Commercial If Multi-Owner and Multi-Unit: Use % Occupied

39 Who s the Qualified Applicant? Owner/Occupant as of 10/1/2016 Life Tenant/Estate Family Trusts What Does the Trust Agreement Say?

40 2015 Homestead Benefit Benefit Pay-Outs 2018 Budget: Reduced Benefit Amounts Senior and Disabled $259(Approximate) All Others $202 (Approximate) All Pay-Outs Began May 2018 Municipality Credits Checks Direct Deposits

41 2015 Homestead Benefit Additional Benefit Pay-Outs 2019 Budget: Increased Benefit Amounts Seniors and Disabled Additional $259 (Approximate) All Others Additional $202 (Approximate) Supplemental Benefit to be Issued November 1, 2018 No Additional Application Required

42 How Is It Paid? Most Receive a Direct Property Tax Credit Shown on an Amended Property Tax Bill Certain Filers Receive a Paper Check or Direct Deposit Continuing Care Community Co-op Housing Complex Certain Estates Sold Residence

43 Information For Your Client Are They Moving? Make us Aware When They File Not Sure if They re Moving? Make us Aware When They File Why is This Important? Benefit Stays with the Property

44

45 2016 Homestead Benefit Application Mailings Began September 2018 File Online in Most Cases Qualifications Remain the Same Filing Deadline November 30, 2018

46 What Should My Client Look For? Homestead Benefit Mailer New 1 Page Letter Includes: ID and Pin Property Information Taxpayer/Spouse Birth Years Multiunit / Multi-Owner Percentage Filing Requirements and Additional Instructions Homestead Benefit

47 Property Tax Reimbursement

48 Property Tax Reimbursement Eligibility Guidelines Age 65/older or Receiving Social Security Disability By 12/31/16 Lived in New Jersey for 10 Years Since 12/31/06 Owned and Lived in the Home for 3 Years Since 12/31/13 Property Taxes Paid Homeowners: By June 1 st of the Following Year Mobile Home Owners: By December 31 st

49 Property Tax Reimbursement Effective PTR Application Year 2007 Paid in Full by 6/1of Subsequent Year Application Years 2006 and Prior Paid in Full by 12/31of Each Year Mobile Home Owners Site Fees Due 12/31

50 Property Tax Reimbursement Income Limits 2017 Income - $87, Income - $87,007

51 Will my Client Actually Get Paid? Payments Began July 15 th Budget Restrictions: Payments ONLY to Incomes $70,000 or less Incomes Over $70,000 No Reimbursement Keep Base Year 2018 PTR-2 Application

52 Income Limits Includes Most Gross Income Categories Social Security Unemployment Military Pension New Jersey Lottery Winnings

53 PTR Pension Treatment Changes to Treatment of Pension Income New Jersey Taxable Pension (Line 19a, Form NJ-1040) Include Tax Exempt Retirement Income US Military Pension Disability Pension Roth IRA

54 Deadline Information 2017 PTR Application Deadline Deadline: October 31, 2018 Reimbursement Checks When Did You Send Your Application? Check Issued on or Before Before May 1, 2018 July 15, 2018 Between May 2 June 1, 2018 Sept. 1, 2018 Between June 2 Sept. 1, 2018 Nov. 1, 2018 Between Sept. 2 Oct. 31, 2018 Dec. 1, 2018

55 First Time Filers Form PTR-1 Establishes 2016 and 2017 Eligibility Reserves Base Year at 2016 Level Difference of 2017 & 2016 Taxes Proof of Property Taxes Paid Must be Included with all PTR Applications

56 2 nd Year and Later Year Filers Form PTR-2 Comes Pre-Printed with Base Year Verifies 2017 Eligibility Difference of 2017 and Base Year

57 Did Your Client Receive the Wrong Form? Your Client Receives a PTR-1 Should Have Received a PTR-2 Contact the Division May Need to Provide Additional Documentation In Most Cases They Will Receive a Notice

58 Why Would My Client s Base Year Change? Income Exceeds the Original Limit Re-establish at the Lower Amount Property Taxes Go Below Base Amount Re-establish at the Lower Amount Applicant Moves Certain Assessment Changes

59 Applicant Moves Form PTR-1-C Already Enrolled in the Program Relocates to another New Jersey Residence Establish Eligibility After 2 Years Division Sends Automatically Contact the Division for the Form

60 Reevaluations & Reassessments Reevaluations Increased or Decreased Property Tax Use the Reevaluated Amount Added Assessments Increased Property Value Results in an Adjusted Base Year Added Assessment Included in Base Year and Current Year

61 Appealed Assessment Results-Increase or Decrease of Property Taxes Applicant must notify Division of the Property Tax Change File Amended Property Tax Reimbursement Application Greater Reimbursement: Division Issues Check for the Difference Lesser reimbursement: Applicant Required to Pay Difference

62 Prior Year Filings Eligible Applicants Forgot to File Missed a Year Didn t Know They Were Eligible File Form, PTR-1For Missing Years Include Supporting Documents Back Dated Base Year

63 Business Taxes New Jersey Tax Updates

64 CBT - Surtax Effective January 1, Year Temporary Surtax Applied to Allocated Net Income Over $1 Million 01/01/18 12/31/ % Surtax 01/01/ /31/ % Surtax

65 CBT Deduction Tax Years Beginning January 1, 2017 Reduced Dividend Deduction Received Dividends From an 80% or More Owned Subsidiary New Deduction 95% Previous Deduction 100% 2017 Amendments Form CBT-DIV Questions:

66 CBT Penalty Relief Calendar Year 2017 CBT-100 Valid Extension Until 10/15/2018 Late Filing Penalties Waived if Filed by 11/15/ Fiscal Year Filers Late Filing Penalties Waived if Filed Within an Additional Month of Extended Due Date Late Payment Penalties and Interest May Still Apply

67 Unitary Combined Reporting New January 1, 2019 CBT: Unitary Combined Reporting Required Combined Group Entities with Common Ownership 50% or More of Voting Control Owned by a Common Owner Unitary Business A Single Economic Enterprise Net Operating Loss Carryovers Prior Separate Return Years Pre-Allocation Loss Converted to Post-Allocation Loss

68 CBT Sourcing Effective January 1, 2019 Market Based Sourcing on Services Sourced Where Benefit of Service is Received Previously: Sourced Where Service is Performed No Location Available Individuals Source to Billing Address Businesses Location Ordered Was Made Benefits Received in Multiple States Allocate

69 2019 Corporate Changes Unitary Combined Reporting CBT-Market Based Sourcing Guidance to Come

70 Film and Digital Media Credit Credit Against the CBT and Gross Income Tax Qualified Film Production or Digital Media Expenses 20% - 30% of New Jersey Expenses, or 25% - 35% of Expenses Incurred in a Qualified Municipality Qualified Municipalities In: Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, or Salem Counties Application Submitted to EDA Prior to Filming

71 Ride Services Surcharge Effective October 1, 2018 Surcharge on Prearranged Rides $.50 per Ride $.25 per Person on Shared Rides Charged & Collected by Transportation Network Companies Lyft, Uber, etc..

72 Tax on Liquid Nicotine Effective September 29, 2018 $.10 per ml Tax on Liquid Nicotine Electronic Smoking Device E-Cigs Charged to: Retail Dealers Collected by: Distributors Wholesalers

73 Sales Tax Rate Sales Tax Rate Remains 6.625%

74 Remote Sellers South Dakota v. Wayfair Quill Decision Overturned New Jersey to Follow Effective November 1, 2018 Substantial Nexus During the Current or Prior Calendar Year $100,000 of Sales, or 200 Separate Transactions

75 Urban Enterprise Zones Are Back! Phased Out Zones Reinstated 5 Zones Previously Ended 11:59 PM 12/31/2016 Bridgeton Camden Newark Plainfield Trenton Businesses Will Need to Re-apply

76 Sales Tax: Transient Rentals Effective October 1, 2018 Transient Rentals Subject to: Sales Tax & State Occupancy Fee Transient Rentals: Air BnB/VRBO Private Rentals Rooms, Houses, or Similar Lodging

77 Transient Rentals: Exemptions Permanent Residency Continual Stays for 90 Days or Over Realtor Transactions Key Provided by Realtor at Off-Site Location Rentals to Government and Exempt Organizations

78 Transient Rentals Possible Effect on Municipal Taxes Municipal Occupancy Tax AC Luxury Tax Cape May County Tourism Millville Sports and Entertainment Tax Local Ordinances Must be Updated to Include Transient Rentals

79 What Your Clients Need to Know Registration Required by: Individual Owners Business Owners Whoever Collects the Rent Collects the Tax Sometimes It s A Platform Otherwise It s Your Client Filing ST-50 HM-100

80 Meadowlands Regional Hotel Use Assessment New August 1, % Hotel Use Assessment Extended Whole Municipality if a Portion is in the Meadowland District Form MRA-100 Monthly

81 Meadowlands Regional Hotel Use Assessment Extended to All Hotels in: Bergen County Carlstadt East Rutherford Little Ferry Lyndhurst Moonachie North Arlington Ridgefield Rutherford South Hackensack Teterboro Hudson County Jersey City Kearny North Bergen Secaucus

82 Miscellaneous Updates

83 Changes to Billing Procedures Earlier Billing Moved up a Month Notify Your Clients While it s Fresh Delayed Cases to Pioneer 2 Billing Notices Foil Notice Case Eligible for Pioneer

84 Payment Plans Your Balance Must be $500 or More No Minimum for Cigarette Tax Property Tax Relief Plans Range from 3-60 Months No Missing Returns Include All Outstanding Debts

85 If You ve Received a Collection Notice Plan handled by PCR Subject to 10.7% Recovery Fee Contact Case Worker

86 Ineligible Payment Plans Anyone Not Qualifying Under Current Guidelines No Formal Payment Plan Submit Monthly Payments Anyway

87 2018 Tax Amnesty

88 New Jersey Tax Amnesty Challenging Economic Climate NJ Still Lagging in Economic Growth Many Find it Difficult to Meet Tax Obligations: Balances Due Filed Tax Returns, but Unable to Pay Tax Obligations in Full Non-Filed Returns A Troubling Number of Previous Filers Have not Kept Up with Filing Effects Funding for Critical State Budget Projects

89 Why Amnesty? Your Clients Can Get Back Into Compliance A Sigh of Relief A Better Sociological Standing NJ Can Fund Important Programs and Services Schools and Education Government Services Meet Financial Obligations to Improve Long-Term Outlook

90 Overview A Limited Time Opportunity Runs November 15 th, January 15 th, 2019 Many Periods are Included Returns Due between February 1, September 1, 2017 Calendar Year Filings: Tax Years Quarterly Filings: 1 st Q nd Q 2017

91 Eligibility Applies to All Taxes Administered by Taxation Not UI/DI (Labor) or Any Fees Imposed by Other Agencies Almost Everyone Who Needs to File or Pay is Eligible Except those Under Criminal Investigation Debts in Appeal or Bankruptcy May Need Special Approval

92 Applying for Amnesty We are Notifying Over 700,000 in Need of Relief Already Billed Debts in Our System Those Who Need to File Tax Returns Most of Amnesty is Electronic Use Amnesty ID and PIN# Can File Most Tax Returns Make Amnesty Payments with Interest Calculation

93 Amnesty Amounts Due Those who Receive an ID and PIN Use Them to Access the Online Amnesty Payment Module Review All Outstanding Items Website Does the Amnesty Interest Calculation Pay the Tax and ½ Interest in Full for Any Items You Want Covered Under Amnesty There is No Partial Amnesty

94 Amnesty Amounts Due Those who Do Not Receive an ID and PIN Go To Select I Do Not Have an Amnesty ID/PIN User Tells Us: Who They Are And What They Owe Businesses will Be Prompted to Register Will Be Necessary to File Outstanding Tax Returns that Require A Pin (e.g. Sales Tax) Remember: A Return Needs to Be Filed and Paid with ½ Interest to Receive Amnesty

95 Filing Tax Returns Under Amnesty Website Directs Your Client to Which Periods Need to be Filed Links to Electronic or Paper Forms File the Tax Return as Normal Come Back to the Amnesty Website to Make Payments This is the Only Way to Accurately Get the Amnesty Interest Calculation

96 If You Don t Apply for Amnesty We Will Impose a 5% Amnesty Penalty Non-Abatable In Addition to Other Penalties and Interest Owed by Law We Will Return to Our Collection Methods

97 Benefits of Amnesty Relieves your Client and the Tax Burden on Other New Jersey Taxpayers Brings in Revenue to Fund Programs and Services Encourages Non-Registered Taxpayers to Come Forward Clears Up Backlogs

98 Benefits of Amnesty Program Expected to Bring in > $100m Clients Can Focus on Keeping Current More taxpayers added to tax rolls reduces the burden on all New Jersey taxpayers Taxation Can Put Resources to Helping The Public With Recent Problems and Questions

99 Special Situations

100 Disputing Debts Dispute Debts Early in Amnesty Client Should Get Supporting Documentation If You Disagree With an Item Call the Amnesty Hotline: (800) Your Client Can Pay Agreed Items While Working Out Disputes

101 Debts Under Judgment (COD) COD Debts are Eligible Under The Same Return Periods and Guidelines Amnesty Does Not Guarantee A Warrant of Satisfaction Your Client Must Pay All Items Related to the COD, including Non- Amnesty items, in Order to Get a Warrant of Satisfaction

102 Bankruptcy Cases Will Need Court or Trustee Approval Don t Have Your Client Pay Debts in Bankruptcy without Court Approval Contact the Division s Bankruptcy Section (609)

103 Voided and Revoked Companies Debts are Still Eligible for Amnesty Reinstatement Fees are Not Eligible File and Pay Any Eligible Debts for Amnesty When Filing for Reinstatement All Tax Filings and Payments Must Be Current Including Non-Amnesty Periods

104 Clients Under Audit Eligible for Amnesty Covered Periods Work Quickly With Auditor/Caseworker Provide Documents Necessary to Complete Audit Must Pay Tax and ½ Interest by January 15, 2019

105 Help With Amnesty Information, Payments and Tax Returns Amnesty Hotline (800) Walk-in Assistance 7 Regional Centers Across New Jersey Visit select About Us

106 Resources For You

107 New Call Center Hours Wednesday Only 10:00am 5:30pm Monday, Tuesday, Thursday, and Friday 8:30am 4:30pm Main Hotline

108 Tax Practitioner Hotline New Jersey Tax Practitioner Hotlines: Income Tax - (609) Business Inquiries - (609) Hotline Limitations: Assistance with S-Corp Election Inheritance and Estate Tax Questions Process Returns Regular Business Hours

109 Regional Information Centers All Offices Reduced Hours 10am 4:30pm Second Wednesday of Every Month Sept 12, 2018 Oct 10, 2018 Nov 14, 2018 Dec 12, 2018 Jan 9, 2019 Feb 13, 2019 Mar 13, 2019 Normal Business Hours Monday Friday 8:30-4:30

110 Practitioner Priority Contact Us Page Choose Tax Practitioner Link Priority Treatment Same Day Response Most Cases

111 Request a Speaker Tax Professionals Tab Request a Speaker Group Examples Tax Professionals Small Businesses Volunteer Income Tax Preparers Senior Citizens Industry Specific Presentations on All New Jersey Tax Topics Just Ask Us!

112 Social Media We Are Now on the Following Social Media Sites: Facebook YouTube Twitter Follow Us to Stay Up-To-Date

113 Need Assistance? New Jersey Tax Practitioner Hotlines: Income Tax - (609) Business Inquiries - (609) Taxation University: Taxation.university@treas.nj.gov