ROSELAND – Several tax changes are in effect for New Jersey residents and businesses, including a new exemption for veterans, an increase in retirement income exclusions, a reduction in the sales and use tax, and the elimination of the estate tax.
In a release, the New Jersey Society of CPAs (NJCPA) reminds residents to consult their certified public accountants for advice and guidance on the following tax changes:
Veteran’s Exemption:
For tax year 2017, individuals who have been honorably discharged or released from active duty in the armed forces, Reserves or National Guard the last day of the tax year are eligible for an additional $3,000 personal exemption on their New Jersey tax return.
Those claiming the exemption must first certify they are exempt with the New Jersey Department of Treasury.
If someone does not certify before filing for the exemption, he or she will need to submit documentation (DD-214) showing the honorable discharge or release.
The Treasury will issue letters confirming eligibility in the first year he or she meets the requirements. More information about qualifying for the exemption can be found on the Division of Taxation’s website at state.nj.us/treasury/taxation/military/vetexemption.shtml.
Retirement Income Exclusions:
Retirement income exclusions increase for the tax year 2017 for those New Jersey residents who have a gross income of $100,000 or less.
The income exclusions doubled to $40,000, $30,000 and $20,000 for filers who are married filing jointly, single or married filing separately, respectively.
The exclusion amounts will continue to increase through tax year 2020.
Sales and Use Tax Reductions:
The New Jersey sales tax rate decreased further in 2018 to 6.625 percent, beginning Jan. 1. This is down from 6.875 percent in 2017, and 7 percent in 2016.
Estate Tax Eliminated:
On Jan. 1, 2018, the New Jersey estate tax was eliminated.
This followed a gradual phase-out from an exclusion amount of $2 million in 2017, and a $675,000 minimum threshold amount in 2016.
“It’s important to stay on top of any and all state and local tax changes, and to know that CPAs provide a level of confidence in facing a variety of these developments,” stated Ralph Albert Thomas, CEO and executive director at NJCPA.
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