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Division of Taxation

Important Income Tax Changes for Tax Year 2016

Earned Income Tax Credit

The New Jersey Earned Income Tax Credit (NJEITC) amount increases to 35% of the applicant’s Federal earned income tax credit for tax year 2016 and after. Complete Worksheet I to calculate the amount.

Filing Deadline

The filing deadline is April 18, 2017, for calendar year taxpayers, the same day the Federal Form 1040 is due. The due date is April 18 instead of April 15 because of the Emancipation Day holiday in the District of Columbia.

Driver’s License Number

The Division of Taxation is asking taxpayers to provide a Driver’s License or State Non-Driver Identification card number on the tax return. Providing this information is voluntary. The Division may use it to validate the taxpayer’s identity in an effort to combat identity theft and fraudulent filing.

Credit for Excess UI/WF/SWF; DI; FLI Withheld

For 2016, the maximum employee unemployment insurance/workforce development partnership fund/supplemental workforce fund contribution was $138.56, the maximum employee disability insurance contribution was $65.20, and the maximum employee family leave insurance contribution was $26.08. If you had two or more employers, you may have contributed more than the maximum amount(s). You must complete Form NJ-2450 to claim credit on your New Jersey tax return for the excess withheld.

Credit for Taxes Paid to Other Jurisdictions

The Philadelphia nonresident wage tax rate for 2016 was 3.4828% (.034828) from January 1 to June 30, 2016, and 3.4741% (.034741) from July 1 to December 31, 2016.

Alternative Business Calculation Adjustment

If you have losses in certain business-related categories of income, you may be able to use those losses to calculate an adjustment to your taxable income. In addition, you can carry forward unused losses in those categories for 20 years to calculate future adjustments. For tax year 2016 the percentage used to calculate the Alternative Business Calculation Adjustment on Schedule NJ-BUS-2 is 50 percent, up from 40 percent in 2015.

Designated Contributions

The Fund for the Support of New Jersey Nonprofit Veterans Organizations has been added to the list of organizations to which you can contribute on the New Jersey tax return. To donate to the new fund, you must specify code number “22” at the “Other Designated Contribution” line.

Achieving a Better Life Experience Program (ABLE) Accounts

Earnings on qualified distributions from Achieving a Better Life Experience Program (ABLE) accounts are exempt from tax. Any earnings on nonqualified distributions are taxable and you must include them as income.

Property Tax Relief Programs

Homestead Benefit Program

Homeowners. New Jersey residents who own and occupy a home in New Jersey, that is their principal residence, may be eligible for a homestead benefit.

Tenants. There is no tenant rebate application for 2016.

Note: Eligibility requirements, including income limits, and benefits available under this program are subject to change.

Property Tax Reimbursement (Senior Freeze) The Senior Freeze (Property Tax Reimbursement) Program reimburses eligible senior citizens or disabled persons for property tax increases. Eligible residents must file a 2016 Property Tax Reimbursement Application (Form PTR-1 or PTR-2).

Income Limits. 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. The 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.

Note: Eligibility requirements, including income limits, and benefits available under this program are subject to change.


Last Updated: Tuesday, 11/17/20