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Division of Taxation

Important Income Tax Changes for Tax Year 2005

  • Form NJ-1040EZ Discontinued
    The NJ-1040EZ resident return form has been discontinued. Taxpayers who need to file a paper return must use Form NJ-1040.

  • Sign Form NJ-1040 on Page 1
    The signature section is now at the bottom of the first page of the form.

  • Dependents’ Information
    The full name, social security number, and year of birth for each dependent child or other dependent must now be provided on Form NJ-1040. In addition, taxpayers who qualify for the New Jersey earned income tax credit must provide the name, social security number, and year of birth for any “qualifying child” listed on their Federal Schedule EIC who is not claimed as a dependent for New Jersey purposes.

  • Retirement Income Exclusions
    The pension and other retirement income exclusions are now only available to taxpayers with gross income of $100,000 or less (before subtracting any pension exclusion).

  • Six-Month Extension of Time to File
    Extensions of time to file the New Jersey income tax return will now be granted for a single, 6-month period, provided all requirements are met.

  • NJ TeleFile
    Taxpayers can now TeleFile if their interest income and dividend income are each less than $10,000. (Previously, the limit was $2,500 in each category.)

  • Credit for Taxes Paid to Other Jurisdictions
    The Philadelphia nonresident wage tax rate for 2005 is .038197.

  • Separate Line for Reporting Penalty for Underpayment of Estimated Tax
    Taxpayers who owe interest for failing to pay the required amount of estimated tax will now report this amount on a separate line of the tax return (Form NJ-1040, Line 43 or Form NJ-1040NR, Line 40).

  • IRC Section 199 Deduction
    New Jersey has uncoupled from many provisions of IRC Section 199. For tax years beginning after December 31, 2004, Form 501-GIT must be used to calculate the New Jersey Domestic Production Activities Deduction allowable for gross income tax purposes.

  • Health Enterprise Zone Deduction
    A new deduction is available for eligible taxpayers who provide primary care medical and/or dental services at a qualified practice located in or within five miles of a Health Enterprise Zone.

  • 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 2005 Property Tax Reimbursement Application (Form PTR-1 or PTR-2) by the extended due date of October 31, 2006. The original due date was June 1.
    Income Limits. For residents applying for reimbursements for tax year 2005, total annual income must be less than:

    For 2004: $40,869 if single, or $50,113 (combined income) if married, and

    For 2005: $41,972 if single, or $51,466 (combined income) if married.

    Note: All property tax relief program information provided here is based on current law and is subject to change.

  • FAIR Property Tax Relief Program
    The FAIR Rebate Program provides rebates for New Jersey homeowners and tenants who meet the eligibility requirements. How residents apply for the FAIR rebate is determined by whether they were a homeowner or a tenant on October 1, 2005. Homeowners and tenants file different applications.

    Tenants who meet the eligibility requirements use the application in the income tax booklet, Form TR-1040, to apply for the FAIR tenant rebate.

    Homeowners do not use the application in the income tax booklet.

    Note: All property tax relief program information provided here is based on current law and is subject to change.

  • Gross Income Tax Rates
    There has been no change in the New Jersey gross income tax rates for tax year 2005. To view the New Jersey tax tables, tax rates schedules, or NJ-WT, Instruction Booklet for Employers, Payors of Pension and Annuity Income and Payors of Gambling Winnings, visit our web site.

Last Updated: Tuesday, 11/17/20