New Jersey Form NJ-1040 Instructions

Form NJ-1040 Instructions
2023 NJ-1040 Instructions
PRSRT STD
US POSTAGE PAID
STATE OF NEW JERSEY

New Jersey Resident Return

NJ-1040
This Booklet Contains:

•	 Form NJ-1040 Resident Return
•	 Form NJ-1040-HW Property Tax Credit/
Wounded Warrior Caregivers Credit Application
•	 Form NJ-1040-V Payment Voucher
•	 Form NJ-2450 Claim for Excess Unemployment/
Disability/Family Leave Insurance Contributions
•	 Form NJ-630 Application for Extension
•	 Form ST-18 Use Tax Return
•	 NJ-EZ Enroll Form
Did you make online, catalog, or out-of-State purchases?
You may owe New Jersey Use Tax. See page 35.

2023
NJ-1040

NJ DIVISION OF TAXATION
PO BOX 269
TRENTON, NJ 08695-0269

					

	

File Electronically

Before you fill out a paper form, consider these reasons why you should file electronically
using NJ E-File or New Jersey Online Filing:
•	 Fastest and most secure way to complete your return
•	 Easy and accurate
•	 Direct deposit available

NJ E-File

You can file your Form NJ-1040 for 2023 using NJ
E-File, whether you are a full-year resident or a partyear resident. Use tax software you purchase, go to an
online tax preparation website, or have a tax preparer
file your return. (You can file both federal and State
Income Tax returns.)

New Jersey Online Filing

Use the free New Jersey Online Filing Service to file
your 2023 NJ-1040 return. It’s simple and easy to
follow the instructions, complete your NJ tax return,
and file it online. Any resident (or part-year resident)
can use it to file their 2023 NJ-1040 for free.

INSERT



State of New Jersey

Department of the Treasury
Division of Taxation

Dear Taxpayer,
We are pleased to introduce the 2023 NJ-1040 return and instructions, which are enclosed for your
convenience.
Important changes were made this tax year to assist residents. New Jersey has doubled the amount
of the Child Tax Credit available for taxpayers with children who are age 5 or younger. Credits
range from $200 to $1,000 for filers with incomes up to $80,000.
Another change involves GetCoveredNJ, the health insurance marketplace where you can obtain
affordable healthcare coverage. If any member of your tax household has no health insurance, you
must complete the new NJ-EZ Enroll form. If you agree to get coverage, you will not have to make
a shared responsibility payment. Simply fill in the oval at line 53b, and complete the new NJ-EZ
Enroll form to receive information on how to get covered.
We also offer an online e-filing service designed to make completing your State tax return as simple
and convenient as possible. This service allows most New Jerseyans to file a tax return free of
charge. You can start your return now and finish it later without losing any information, and you can
upload copies of W-2s and other financial documents. Once submitted, you will receive immediate
confirmation that your return has been received by the State of New Jersey. Visit our website at
nj.gov/treasury/taxation to get started.
As always, feel free to contact us if you have any questions. I wish you and your family all the best
in the New Year.

Sincerely,

Marita R. Sciarrotta
Acting Director
Division of Taxation

Table of Contents
When to File............................................................................................................. 4
Extension of Time to File.......................................................................................... 4
Taxpayer Identification.............................................................................................. 5
Part-Year Residents................................................................................................. 5
Filing Status.............................................................................................................. 5
Exemptions............................................................................................................... 6
Dependent Information............................................................................................. 7
Income...................................................................................................................... 7
Schedule NJ-DOP — Disposition of Property........................................................ 11
Schedule NJ-BUS-1 — Business Income Summary.............................................. 16
Pension/Retirement Exclusion and Other Retirement Income Exclusion............... 20
Deductions............................................................................................................. 23
Property Tax Deduction/Credit................................................................................ 25
Calculating Your Tax Liability.................................................................................. 31
Credit for Income Taxes Paid to Other Jurisdictions............................................... 31
Schedule NJ-COJ — Taxes Paid to Other Jurisdiction........................................... 31
Use Tax Due........................................................................................................... 35
Shared Responsibility Payment............................................................................. 37
Withholdings/Payments.......................................................................................... 41
New Jersey Earned Income Tax Credit.................................................................. 42
Wounded Warrior Caregivers Credit...................................................................... 43
Child and Dependent Care Credit.......................................................................... 43
New Jersey Child Tax Credit.................................................................................. 44
Charitable Contributions......................................................................................... 44
How to Pay............................................................................................................. 46
Where to Mail Your Return..................................................................................... 47
Military Personnel................................................................................................... 47
Deceased Taxpayers.............................................................................................. 48
NJ-1040-HW — Property Tax Credit/Wounded Warrior Caregivers
	

Credit Application............................................................................................. 49

County/Municipality Codes..................................................................................... 52
Tax Table................................................................................................................ 54
Tax Rate Schedules............................................................................................... 63
Index....................................................................................................................... 66

2023 Form NJ-1040

3

Do You Have to File a New Jersey Income Tax Return?
You are required to file a return if –
your filing status is:

and your gross income from everywhere for the entire year
was more than the filing threshold:

Single
Married/CU partner, filing separate return

$10,000

Married/CU couple, filing joint return
Head of household
Qualifying widow(er)/surviving CU partner

$20,000

Also file a return if –
•• You had New Jersey Income Tax withheld and are due a refund.
•• You paid New Jersey estimated taxes for 2023 and are due a refund.
•• You are eligible for a New Jersey Earned Income Tax Credit or other credit and are due a refund.
If you are NOT required to file a return and you:
•• Are a homeowner or tenant age 65 or older or disabled, you may be eligible for a Property Tax Credit. See the instructions for
Form NJ-1040-HW on page 49;
•• Provided care for a disabled veteran who is related to you and lived with you, you may be eligible for a Wounded Warrior
Caregivers Credit. See the instructions for Form NJ-1040-HW on page 49.

Which Form to File

Military personnel and their spouses/civil union partners, see page 47.
Was New Jersey your domicile (see
definition on page 4) for any part of
the year?

Yes

Did you maintain a permanent*
home in New Jersey?

Yes

No

No

Did you maintain a permanent
home outside New Jersey?

No

Yes
Did you spend more than 30
days in New Jersey?

Yes

No
No

Did you maintain a permanent*
home in New Jersey for any part of
the year?

File Form NJ-1040NR if you had
income from New Jersey sources.

No

Yes

Did you spend more than 183
days in New Jersey?

File Form NJ-1040
Part-year residents: If New Jersey
was your domicile for only part of
the year and you received income
from New Jersey sources while
you were a nonresident, also file
NJ-1040NR.

Yes

File Form NJ-1040
Part-year residents: If you had a
permanent home in New Jersey
for only part of the year and you
received income from New Jersey
sources while you were a nonresident, also file NJ-1040NR.

*	A home is not permanent if it is maintained only for a temporary period to accomplish a particular purpose (e.g., temporary job assignment). A home used only for vacations is not a permanent home.
New Jersey Residents Working/Living Abroad. Use the chart above to determine if you are considered a New Jersey resident for
tax purposes. New Jersey residents working or living abroad have the same filing and payment requirements as residents living in
New Jersey.
Part-Year Residents. There is no part-year resident return. You may have to file both Form NJ-1040 to report income you received
for the part of the year you were a resident and Form NJ-1040NR if you had income from New Jersey sources for the part of the year
you were a nonresident. 

2023 Form NJ-1040

4

Things to Know Before You Begin
Your 2023 NJ-1040
Check the following items to avoid mistakes that delay returns
and refunds.

When to File

In general, your New Jersey Income Tax return is due when
your federal income tax return is due. If you are a calendar
year filer, your 2023 New Jersey Income Tax return is due by
April 15, 2024. Fiscal year filers, see page 5.
Postmark Date
All New Jersey Income Tax returns postmarked on or before
the due date of the return are considered filed on time. Tax returns postmarked after the due date are considered filed late. If
the postmark date on your return is after the due date, the filing
date for that return is the date we received your return, not the
postmark date.

Extension of Time to File

There is no extension of time to pay your tax due – only to
file. Penalties and interest will be charged if you pay your tax
after April 15, 2024. (Military personnel and civilians providing support to the Armed Forces, see page 47.)
You can receive a six-month extension of time to file if you
pay at least 80% of your tax liability (line 45) through withholdings, estimated payments, or other payments by the original due date, and
•• You enclose a copy of your federal Application for Automatic Extension, if filed by paper, and fill in the oval on
the front of your NJ-1040; or
•• You file Form NJ-630, Application for Extension of
Time to File New Jersey Gross Income Tax Return, by
April 15, 2024. You can file an extension application
online until 11:59 p.m., April 15, 2024, at nj.gov/taxation
or use the NJ-630 provided at the front of this booklet.
If you do not meet the requirements for an extension, or you
do not file your return by the extended due date, we will deny
your extension request and charge penalties and interest from
the original due date of the return. (See “Penalties and Interest” on page 47.) You will not receive an approved copy of
your extension request. We will notify you only if we deny
your request, but not until after you actually file your return.

Filling Out the Form Properly

•• Use only a 2023 return for the 2023 Tax Year.
•• Use only blue or black ink.
•• Enter last name first on the return. This is different from
the federal return.

•• Use “State Wages” from box 16 of your W-2, not federal
wages (box 1).
•• Do not use dollar signs or dashes.
•• Do not report a loss on Form NJ-1040 (see page 7).
•• If a line does not apply to you, leave it blank. There is an
exception for Use Tax, line 51. See page 35.
•• To request a refund, you must enter an amount on
line 80.

Rounding

Instead of making dollars-and-cents entries on your return, you
can round and use whole dollar amounts. If you round, do so
for all lines, and enter “00” after the decimal for cents.
Round amounts of 50 cents or more up to the next whole dollar. For example, $26.78 becomes $27.00.
Round amounts of less than 50 cents down to the next whole
dollar. For example, $13.45 becomes $13.00.
Round the total, not the amounts used to calculate the total.
For example, the sum of $13.45 and $46.24 is $59.69, which
becomes $60.00.

Terms to Know

Domicile. A domicile is the place you consider your permanent
home – the place where you intend to return after a period of
absence (e.g., vacation, business assignment, educational leave).
You have only one domicile, although you may have more than
one place to live. Your domicile does not change until you move
to a new location with the intent to establish your permanent
home there and to abandon your New Jersey domicile. Moving
to a new location, even for a long time, does not change your
domicile if you intend to return to New Jersey. Your home,
whether inside or outside New Jersey, is not permanent if you
maintain it only for a temporary period to accomplish a particular purpose (e.g., temporary job assignment). For more information, see GIT-6, Part-Year Residents and Nonresidents.
Principal Residence (Main Home). A principal residence
(main home) is a home you own or rent and actually occupy as
your permanent residence. It does not include a vacation home,
a “second home,” or property you own and rent to someone
else. The term main home may be used in place of principal
residence in these instructions.
Spouse/Civil Union Partner. The term spouse also refers to a
spouse who entered into a valid same-sex marriage in another
state or foreign nation and a partner in a civil union (CU) recognized under New Jersey law.

2023 Form NJ-1040

Line-by-Line Instructions
Name and Address

Place the peel-off label from the front of this booklet in the
name and address section at the top of the return. Do not use
the label if any of the information is incorrect. If it has incorrect information or you do not have a label, print or type
the information in the spaces provided. If you are filing jointly,
include your spouse’s name. Your refund and next year’s form
will be sent to the address you provide.
Foreign Address. Fill in the oval if your mailing address is
outside the United States.
Change of Address. Fill in the oval if your address has
changed since you last filed a New Jersey return or if any of
the address information on your label is incorrect.

Social Security Number

You must enter your Social Security number in the boxes
provided on the return, one digit in each box. If you are filing jointly, enter both filers’ numbers in the same order as the
names.
If you (or your spouse) do not have a Social Security number,
contact the Social Security Administration to apply for one. If
you are not eligible for a Social Security number, contact the
Internal Revenue Service to get an individual taxpayer identification number (ITIN) and enter your ITIN in the boxes provided for your Social Security number. If you (or your spouse)
applied for but have not received an ITIN by the return due
date, enclose a copy of your federal Form W-7.

County/Municipality Code

Enter the four-digit code of your current residence from the
table on page 52. Enter one digit in each box.

Federal Extension Filed

Fill in the oval if you filed a federal Application for Automatic
Extension.
Enclose a copy of the federal extension request with your return if you filed it by paper.
For more information on extensions, see page 4.

Part-Year Residents

If you were a New Jersey resident for only part of the year,
list the month and day in the tax year your residency began
and the month and day in the tax year it ended. For example,
if you moved to New Jersey August 4, 2023, enter 08/04/23 to
12/31/23.

5

You must file a return if your income for the entire year (not
just your period of New Jersey residency) was more than the
filing threshold for your filing status (see page 3). Only report
income you earned while a New Jersey resident.
You must prorate exemptions, deductions, credits, and the pension/retirement and other retirement income exclusions based
on the number of months you were a New Jersey resident. For
this calculation, 15 days or more is considered a month. If you
received income from a New Jersey source while you were a
nonresident, you must also file a New Jersey nonresident return.
For more information, see GIT-6, Part-Year Residents and
Nonresidents.

Fiscal Year Filers

If you are a fiscal year filer, you must file your New Jersey Income Tax return by the 15th day of the fourth month following
the close of the fiscal year.
Enter the month that your fiscal year ends in the boxes provided.

Lines 1–5 – Filing Status

In general, you must use the same filing status as you do for
federal purposes. Fill in only one oval.
Single. Your filing status is single if you were not married or
a partner in a civil union on the last day of the tax year, and
you do not qualify to file head of household or qualifying
widow(er)/surviving CU partner.
Married/Civil Union Couples. If you are married and file
a joint federal return, you must also file a joint New Jersey
return. If you file separate federal returns, you must also file
separate State returns. However, if you are a partner in a civil
union, your filing status for New Jersey may not match your
federal filing status.
If during the entire tax year one spouse was a resident and the
other a nonresident, the resident can file a separate New Jersey
return. The resident calculates income and exemptions as if a
federal married, filing separate return had been filed. You have
the option of filing a joint return, but in that case, your joint
income would be taxed as if you both were residents.
If you are filing separately, enter your spouse’s Social Security
number in the boxes provided.
Note: You can file jointly or separately only if you were married or a partner in a civil union on the last day of the tax year.
Head of Household. You can use this filing status if you meet
the requirements to file as head of household for federal purposes. Visit the IRS website at irs.gov for more information.

6

2023 Form NJ-1040

Qualifying Widow(er)/Surviving CU Partner. You can use
this filing status if your spouse died in 2021 or 2022 and you
meet the requirements to file as Qualifying Surviving Spouse
for federal purposes. Visit the IRS website at irs.gov for more
information.

You must enclose a copy of the doctor’s certificate or other
medical records evidencing legal blindness or total and permanent disability the first time you claim the exemption(s).

Fill in the oval indicating the year in which your spouse died.

You can claim a $6,000 exemption if you are a military veteran
who was honorably discharged or released under honorable
circumstances from active duty any time before the last day of
the tax year. If you are filing jointly, your spouse can also take
this exemption if they are a military veteran who meets the requirements. You cannot claim this exemption for your domestic partner or dependents.

Civil Unions. Partners in a civil union must file their New
Jersey Income Tax returns using the same filing statuses as
spouses under New Jersey Gross Income Tax Law. If you are a
partner in a civil union, your New Jersey filing status may not
match your federal filing status.
For more information, see GIT-4, Filing Status.

Exemptions – Lines 6–12

Fill in the ovals that apply. For each line, enter a total in the
boxes to the right and complete the calculation. The number
of exemptions you are claiming must be entered in the boxes
or the exemption(s) will be disallowed. The number of ovals
filled in must equal the number of exemptions claimed.

Line 6 – Regular Exemptions

You can claim a $1,000 exemption for yourself and your
spouse/CU partner (if filing a joint return) or your domestic
partner.

Line 9 – Veteran Exemptions

You must provide official documentation showing that you
were honorably discharged or released under honorable
circumstances from active duty the first time you claim the
exemption(s). Your documentation must list your character of
service (discharge).
A list of acceptable documentation and ways to submit it is
available on our website at nj.gov/treasury/taxation/military/
vetexemption-documentation.shtml

Line 10 – Qualified Dependent Children

You can claim a $1,500 exemption for each child who qualifies
as your dependent for federal tax purposes.

Note: The domestic partnership must be registered in New Jersey by the last day of the tax year. You can only claim your domestic partner if they do not file a New Jersey return. You must
enclose a copy of your Certificate of Domestic Partnership the
first time you claim the exemption.

Line 11 – Other Dependents

Line 7 – Senior 65+

You can claim an additional $1,000 exemption for each dependent student if all the requirements below are met. You cannot
claim this exemption for yourself, your spouse, or your domestic partner.
•• Student must be claimed as a dependent on line 10 or 11.
•• Student must be under age 22 on the last day of the tax
year (born 2002 or later).
•• Student must attend full-time. Full-time is determined by
the school.
•• Student must spend at least some part of each of five calendar months of the tax year at school.
•• The educational institution must be an accredited college
or post-secondary school, maintain a regular faculty and
curriculum, and have a body of students in attendance.

You can claim a $1,000 exemption if you were 65 or older on
the last day of the tax year (born in 1958 or earlier). If you are
filing jointly, your spouse can take a $1,000 exemption if they
were 65 or older on the last day of the tax year. You cannot
claim this exemption for your domestic partner or dependents.
You must enclose proof of age such as a copy of a birth certificate, driver’s license, or church records the first time you claim
the exemption(s).

Line 8 – Blind or Disabled

You can claim a $1,000 exemption if you were blind or disabled on the last day of the tax year. If you are filing jointly,
your spouse can take a $1,000 exemption if they were blind or
disabled on the last day of the tax year. You cannot claim this
exemption for your domestic partner or dependents.

You can claim a $1,500 exemption for each other dependent
who qualifies as your dependent for federal tax purposes.

Line 12 – Dependents Attending Colleges

•• You must have paid one-half or more of the tuition and
maintenance costs for the student. Financial aid received
by the student is not calculated into your cost when totaling one-half of your dependent’s tuition and maintenance.
However, the money earned by students in college work
study programs is income and is taken into account.

2023 Form NJ-1040

Line 13 – Total Exemption Amount

Add the amounts on lines 6 through 12 and enter the total. Add
the amounts from the lines, not the numbers in the boxes.

Line 14 – Dependent Information

Enter the full name, Social Security number, and birth year for
each dependent child or other dependent you claimed on line
10 or 11. Fill in the oval for each dependent who does not have
health insurance coverage (including NJ Family Care/Medicaid, Medicare, private, or other health insurance) on the date
you file the return.
Enter the same Social Security number, individual taxpayer
identification number (ITIN), or adoption taxpayer identification number (ATIN) for each dependent that you entered on
your federal return. If you do not provide a valid Social Security number, ITIN, or ATIN for a dependent, the exemption
will be denied.
If you have more than four dependents, enter the information for your first four dependents on the lines provided. Enclose a statement listing the information for your additional
dependents.
Note: If you qualify for the New Jersey Earned Income Tax
Credit (see instructions for line 58) and you listed a “qualifying child” on your federal Schedule EIC who is not claimed as
your dependent for New Jersey purposes, you must enter the
child’s name, Social Security number, and birth year.

Income Lines 15–26

Gross income means all income you received in the form
of money, goods, property, and services unless specifically
exempt by law. You must report taxable income from everywhere, whether from inside or outside the State (worldwide).
Report all income on the proper lines. For example, do not
enter pension income on the wage line.
Accounting Method. Use the same accounting method for
New Jersey Income Tax that you used for federal income tax
purposes. Income must be recognized and reported in the same
period as it is recognized and reported for federal purposes.
Reporting Losses. If you have a net loss in any category of
income, remember the following:
•• You cannot report a loss on your NJ-1040 (e.g., in parentheses or as a negative number);
•• You can net losses with gains in the same category of
income. For example, you can subtract gambling losses
from gambling winnings during the tax year;
•• You cannot apply a net loss in one category of income
against income or gains in a different category on your
NJ-1040. For example, you cannot subtract gambling
losses from your wages;

7

•• If you have a net loss in any income category, make no
entry on that line of your NJ-1040. Do not enter zero. Do
not enter the amount of the loss in parentheses or as a
negative number;
•• No carryback or carryover of losses is allowed when reporting income on your NJ-1040.
Income Taxed by Another Jurisdiction. If you have income
that is taxed both by New Jersey and another jurisdiction outside New Jersey, you may be eligible for a credit against your
New Jersey tax. (See instructions for line 44.)

Examples of Taxable Income
New Jersey taxable income includes:
•• Wages and other compensation;
•• Interest and dividends (including interest paid on income
tax refunds);
•• Earnings on nonqualified distributions from (1) qualified tuition program accounts or (2) qualified state 529A
Achieving a Better Life Experience program (ABLE)
accounts;
•• Earnings on nonqualified distributions from NJBEST
accounts, and any portion of the distributions that are attributable to contributions previously deducted on a New
Jersey Income Tax return;
•• Net profits from business, trade, or profession;
•• Net gains or income from sale or disposition of property;
•• Pensions, annuities, and IRA withdrawals;
•• Net distributive share of partnership income;
•• Net pro rata share of S corporation income;
•• Net rental, royalty, and copyright income;
•• Net gambling winnings, including New Jersey Lottery
winnings from prize amounts over $10,000;
•• Alimony;
•• Estate and trust income;
•• Income in respect of a decedent;
•• Prizes and awards, including scholarships and fellowships (unless they satisfy the conditions on page 19);
•• Value of residence provided by employer;
•• Fees for services rendered, including jury duty.
New Jersey taxable income also includes the following that are
not subject to federal income tax:
•• Interest from obligations of states and their political
subdivisions, other than New Jersey and its political
subdivisions;
•• Income earned by a resident from foreign employment;
•• Certain contributions to pensions and tax-deferred
annuities;
•• Employee contributions to federal Thrift Savings Funds,
403(b), 457, SEP, or any other type of retirement plan
other than 401(k) Plans.

8

2023 Form NJ-1040

Examples of Exempt (Nontaxable) Income
Do not include the following income when determining if you
must file a return. These items should not appear anywhere on
your form except for tax-exempt interest, which you report on
line 16b.
•• Federal Social Security
•• Railroad Retirement (Tier 1 and Tier 2)
•• United States military pensions and survivor’s benefit
payments
•• Life insurance proceeds received because of a person’s
death
•• Employee’s death benefits
•• Permanent and total disability, including VA benefits
•• Temporary disability received from the State of New Jersey or as third-party sick pay
•• Workers’ Compensation
•• Election worker compensation
•• Gifts and inheritances
•• Qualifying scholarships or fellowship grants
•• New Jersey Lottery winnings from prizes in the amount
of $10,000 or less
•• Unemployment Compensation received from the state
(but not supplemental unemployment benefit payments)
•• Family Leave Insurance (FLI) benefits
•• Interest and capital gains from (1) obligations of the
State of New Jersey or any of its political subdivisions;
or (2) direct federal obligations exempt under law, such
as U.S. Savings Bonds and Treasury Bills, Notes, and
Bonds
•• Distributions paid by mutual funds to the extent the distributions are attributable to interest earned on federal
obligations
•• Certain distributions from New Jersey qualified investment funds
•• Earnings on qualified distributions from (1) qualified
tuition program accounts or (2) qualified state 529A
Achieving a Better Life Experience program (ABLE)
accounts
•• Qualified distributions from NJBEST accounts
•• Employer and employee contributions to 401(k) Plans up
to the federal limit (but not federal Thrift Savings Funds)
•• Some benefits received from certain employer-provided
cafeteria plans (but not salary reduction or premium conversion plans). See Technical Bulletin TB-39.
•• Benefits received from certain employer-provided commuter transportation benefit plans (but not salary reduction plans). See Technical Bulletin TB-24(R).
•• Contributions to and distributions from Archer MSAs if
they are excluded for federal income tax purposes
•• Direct payments and benefits received under homeless
persons assistance programs

•• ANCHOR Benefits
•• Homestead Benefits
•• Senior Freeze (Property Tax Reimbursement) program
benefits
•• Income Tax refunds (New Jersey, federal, and other jurisdictions), but not interest paid on refunds
•• New Jersey Earned Income Tax Credit payments
•• Middle-Class Tax Rebates
•• Paycheck Protection Program (PPP) loan amounts forgiven through the federal CARES Act or federal Paycheck Protection Program
•• Economic Impact Payments (stimulus payments)
•• Welfare
•• Child support
•• Amounts paid as reparations or restitution to Nazi Holocaust victims
•• Assistance from a charitable organization, whether in the
form of cash or property
•• Cancellation of debt
•• Amounts received as damages for wrongful
imprisonment
•• Qualified disaster relief payments excluded under IRC
§139
•• Payments from the September 11th Victim Compensation Fund

Line 15 – Wages, Salaries, Tips, etc.

Enter the total of State wages, salaries, tips, bonuses, commissions, etc., from all employment both inside and outside New
Jersey. Take the amount from box 16 of your W-2 (see sample
on page 9). Include all payments whether in cash, benefits, or
property.
If you were employed outside New Jersey, you may need to
adjust your wages to reflect New Jersey tax law. For example,
if you had a Section 125 cafeteria plan that is taxable for New
Jersey purposes but is not included in box 16 of your W-2, you
must add that amount back into your State wages.
Retirement Plans. Under New Jersey law, contributions to
retirement plans (other than 401(k) Plans) are included in State
wages on the W-2 in the year the wages are earned. This may
cause your State wages (box 16) to be higher than your federal
wages (box 1).
Meals and/or Lodging. You can ex­clude meals and/or lodging
reported as wages on your W-2 if:
1.	 The meals and/or lodging were provided on the business
premises of your employer; and
2.	 The meals and/or lodging were provided for the convenience of your employer; and

2023 Form NJ-1040
For lodging only:
3.	 You were required to accept the lodging as a condition of
your e­ mployment.
If you exclude the value of meals and/or lodging from your
wages, you must en­close a signed statement explaining how
you met these conditions. If you do not enclose the statement,
your wages will be changed back to the full amount shown on
your W-2.
New Jersey State Police officers cannot ex­clude food and
maintenance payments received as part of their union contract.
These pay­ments do not meet the criteria on page 8.
Employee Business Expenses. Employee business expenses
are not deductible for New Jersey tax purposes. However, you
can exclude reimbursements for employee business expenses
reported as wages on your W-2 if:
1.	 The reim­bursements are for job-related expenses;
2.	 You are required to and do account for these expenses to
your employer; and
3.	 You are reimbursed by your employer in the exact
amount of the allowable expenses.
If you received excludable reimbursements for employee business expenses that were included in wages on your W-2, en­
close a statement explaining the amount you are excluding and
your reasons. Also, enclose a copy of your federal Form 2106.

9

Federal Statutory Employees. If you are considered a “statutory employee” for federal tax purposes, you cannot deduct
your business expenses unless you are self-employed or an
independent contractor under New Jersey law. The federal
label of “statutory employee” has no meaning for New Jersey
tax purposes. Business expenses can only be deducted from
the business in­come of a self-employed individual. See the
instructions for Schedule NJ-BUS-1, Part I (Net Profits From
­Business) on page 16.
Moving Expenses. Moving expenses are not deductible for
New Jersey Income Tax purposes.
You can, however, exclude reimbursements for the following
moving expenses if you met the federal require­ments to claim
moving expenses that were in effect on December 31, 2017,
and the expenses were included in wages on your W-2:
1.	 The cost of moving your household goods and personal
effects from the old home to the new home.
2.	 The actual expenses you incurred for traveling, meals,
and lodging when moving yourself and your family from
your old home to your new home.
Reimbursements for any other moving expense cannot be excluded from i­ncome.
If you received excludable reimbursements for moving expenses that were included in wages on your W-2, enclose a
statement explaining the amount you are excluding and your
reasons.

Sample W-2 (This form is for illustration only and is not reproducible.)
	
	

	

	 2 2 2 2
2

Void

	
	

a	 Employee’s social security number	
	

For Official Use Only 
OMB No. 1545-0008

b	 Employer identification number (EIN)		 1	

Wages, tips, other compensation		 2	

					

Federal income tax withheld

	

c	 Employer’s name, address, and ZIP code		 3	

Social security wages	

	 4	

Social security tax withheld

			 5	

Medicare wages and tips	

	 6	

Medicare tax withheld

	 8	

Allocated tips

					
					

			 7	 Social security tips	
9

			
d	 Control Number		 9	

					
e	 Employee’s first name and initial	

Last name		11	

		
	
	10	 Dependent care benefits

Nonqualified plans		12a	 See instructions for box 12

									
	
13	Statutory	
		
employee	

Retirement	
plan	

Third-party	
sick pay

12b

								
14	

	

Other	

		

12c

UI/WF/SWF - $174.68				
	
	 DI - $0.00		 12d			
		 DI P.P. #(Private Plan No.)				

		

f	

Employee’s address and ZIP code

15 State	

	 NJ	
	

Employer’s state ID number	

16	State wages, tips, etc.	

234-567-890/000		

142,900.00	

FLI P.P. #	

(Private Plan No.)	

		
Wage and Tax Statement	
Form
	

W-2	

17	State income tax	

	

18	Local wages, tips, etc. 	

6,977.00			

19	Local income tax 	

20	Locality name

94.08 - FLI							

2023	

Department of the Treasury—Internal Revenue Service
For Privacy Act and Paperwork Reduction
Act Notice, see the separate instructions.

2023 Form NJ-1040

10

Compensation for Injuries or Sickness. Certain amounts
received for personal injuries or sickness are not subject to tax.
You can exclude such amounts included as wages on your W-2
if:
1.	 The payments were compensation for wage loss that resulted from absence due to your injury or sickness; and
2.	 The payments were due and pay­able under an enforceable contractual obligation under the plan; and
3.	 The payments were not related to sick leave wage continuation, which is largely discretionary and payments
are made regardless of the reason for absence from work.
If such payments are included in wages on your W‑2, enclose
Form NJ‑2440.
You must enclose all W-2s with your tax return. Do not attach them to your return.
If you paid taxes to another jurisdiction on wages entered on
this line, see the instructions for line 44.

Part-Year Residents. You must determine from each W-2
the portion of your “State wages, tips, etc.” (box 16) that you
earned while you were a New Jersey resident. If your W-2 includes only wages you earned while you were a resident, use
the amount from box 16. If your employer did not separate
your resident and nonresident wages on the W-2, you must apportion the amount in box 16 according to the time you lived
in New Jersey. Include only the actual amount you earned
while you were a resident.
If the total amount reported on a W-2 is for income from an
out-of-State source while you were a nonresident, do not include that income on your resident return.

Line 16a – Taxable Interest Income

Enter all of your taxable interest from sources both inside and
outside New Jersey.
Common sources of taxable interest:
•• Banks;
•• Savings and loan associations;
•• Credit unions;
•• Savings accounts;
•• Checking accounts;
•• Bonds and notes;
•• Certificate of deposit;
•• Life insurance dividends;
•• Earnings on nonqualified distributions from qualified tuition program accounts including NJBEST (New Jersey
Better Educational Savings Trust program) accounts;

•• Earnings on nonqualified distributions from qualified
state 529A ABLE (Achieving a Better Life Experience)
accounts;
•• Distributions from Coverdell education savings accounts
(ESAs), but only the earnings portion;
•• Ginnie Maes, Fannie Maes, Freddie Macs;
•• Repurchase agreements;
•• Obligations of states and their political subdivisions,
other than New Jersey;
•• Grantor trusts;
•• Any other interest not specifically exempt.
Do not include on this line:
•• Interest that was earned and paid to a sole proprietorship,
a partnership, or an S corporation. Report on Schedule
NJ-BUS-1. Note: If you received a Form 1099 from
a partnership or an S corporation for interest paid or
deemed to have been paid to you, you must include that
interest on line 16a;
•• Interest that was earned and paid to an estate or trust
(other than a grantor trust). Report on line 26.
Forfeiture Penalty for Early Withdrawal. If you incur a penalty by withdrawing a time deposit early, you can subtract the
amount of the penalty from your interest income.
If line 16a is more than $1,500, enclose a
copy of Schedule B, federal Form 1040.

Part-Year Residents. Include only the interest you received while you were a resident of New Jersey.

Line 16b – Tax-Exempt Interest Income

Enter all of your tax-exempt interest, including the exempt
portion of a distribution from a New Jersey qualified investment fund. Do not include interest earned on your IRA(s) on
this line. If you made a withdrawal from your IRA, see the
instructions for lines 20a and 20b.
For more information on tax-exempt interest income and New
Jersey qualified investment funds, see GIT-5, Nontaxable Investment Income.
If line 16b is more than $10,000, you must
enclose a listing of the amount received from
each source. If the total of lines 16a and 16b is different from
the federal interest total, enclose a statement explaining the
difference.

Part-Year Residents. Include only the interest you received while you were a resident of New Jersey.

2023 Form NJ-1040

Line 17 – Dividends

Enter the dividends you received from investments (e.g., from
stocks, mutual funds) or other income-producing activities that
do not constitute a trade or business. The total taxable dividends received, regardless of where earned, must be reported.
Taxpayers, including partners in a partnership and shareholders
of an S corporation, report global intangible low-taxed income
(GILTI) as dividend income when the income is actually distributed from earnings and profits. See “IRC §951A: Reporting and Payment/Pass-through Entities” at nj.gov/treasury/
taxation/TCJA.shtml for more information.
Do not include on this line:
•• Dividends that were earned and paid to a sole proprietorship, a partnership, or an S corporation. Report on
Schedule NJ-BUS-1. For more information on reporting partnership or S corporation income, see GIT-9P,
Partnership Income, or GIT-9S, Income From S
Corporations;
•• Dividends that were earned and paid to an estate or trust
(other than a grantor trust). Report on line 26.
Capital Gains Distributions. Do not report capital gains distributions you received from mutual funds or other regulated
investment companies on this line. Report this income on
line 2, Schedule NJ-DOP.
Tax-Free Distributions. A distribution that is a return of your
investment or capital and does not come from earnings or profits is a nontaxable capital or tax-free distribution. These distributions reduce the basis of the stock or investment and are not
taxable until your investment is fully recovered.

11

Insurance Premiums. Dividends you received from insurance
companies are not taxable unless the amount you received is
more than the premiums paid. Any interest from accumulated
insurance dividends is taxable, and you must report it on
line 16a.

Part-Year Residents. Include only the dividends you received while you were a resident of New Jersey.

Line 18 – Net Profits From Business

Complete Part I of Schedule NJ-BUS-1 and enter on line 18
the amount from line 4 of Part I. If the amount on line 4 is a
loss, make no entry on line 18. See instructions on page 16.
Enclose Schedule NJ-BUS-1 and a copy of
the federal Schedule C (or C-EZ or F) for
each business with your return.

Line 19 – Net Gains or Income From
Disposition of Property

Complete Schedule NJ-DOP and enter the amount from line 4.
If the amount on line 4 is a loss, make no entry on line 19.
Do not include on Schedule NJ-DOP:
•• Gains/losses from the disposition of property owned by
a sole proprietorship, a partnership, or an S corporation.
Report on Schedule NJ-BUS-1;
•• Gains/losses from the disposition of property owned by
an estate or trust (other than a grantor trust). Report on
line 26.
Enclose Schedule NJ-DOP with your return.

Schedule NJ-DOP

Net Gains or Income From Disposition of Property
Report your capital gains and income from the sale or exchange of property. You can deduct the expenses of the sale and your basis in
the property from the sales price.
In general, when calculating your gain or loss, you will use the cost or adjusted basis that you used for federal purposes. However, in
certain situations, you may use a different basis.

• Sale of interest in a partnership, a sole proprietorship, or rental property. You may be required to use a New Jersey adjusted basis.
• Sale of S corporation shares. You must use your New Jersey adjusted basis.

Sale of Principal Residence (Main Home). Capital gain is calculated the same way as for federal purposes. Any amount that is taxable for federal purposes is taxable for New Jersey purposes. Visit the IRS website at irs.gov for more information on reporting capital
gains from the sale of a main home.
Installment Sales. You must report all gains from installment sales in the same year as they are reported for federal purposes. If the
New Jersey basis is different from the federal basis, you must make a New Jersey installment sale calculation and report the New Jersey gain.

12

2023 Form NJ-1040

Depreciation and Expense Deduction. New Jersey and federal depreciation and expense deduction limits are different. A New Jersey
depreciation adjustment may be required for assets placed in service on or after January 1, 2004. Complete the Gross Income Tax Depreciation Adjustment Worksheet GIT-DEP to calculate the adjustment.
Complete Liquidation. If you had an interest in a partnership, sole proprietorship, or S corporation that sold or disposed of virtually
all of its assets in conjunction with the complete liquidation of the entity, you must report your portion of the gain or loss from the sale
or disposition of those assets.

Line 1: List of Transactions

List any New Jersey taxable transaction(s) as reported on your federal Schedule D, indicating the gain or loss for each transaction in
column f. In listing the gain or loss on disposition of rental property, you must take into consideration the New Jersey adjustment from
Worksheet GIT-DEP, Part I, line 6.
Do not include gains or losses from the sale of exempt obligations. See GIT-5, Nontaxable Investment Income.
There is no distinction between active and passive losses for New Jersey purposes. You cannot carry back or carry forward such losses
when reporting income on Form NJ-1040. You can deduct federal passive losses in full in the year incurred against any gain within the
same category of income, but only in the year that it occurred.

Line 2: Capital Gains Distributions

Enter your capital gains distributions from Form 1099-DIV(s) or similar statement(s). Do not include capital gains from a New Jersey
Qualified Investment Fund that are attributable to qualified exempt obligations or gains from mutual funds to the extent attributable to
federal obligations. For more information on New Jersey qualified investment funds, see GIT-5, Nontaxable Investment Income.

Line 3: Other Net Gains

Enter the net gains or income less net losses from disposition of property not included on lines 1 or 2 of Schedule NJ-DOP.

Line 4: Net Gains

Enter the total of the amounts listed on line 1, column f and lines 2 and 3, netting gains with losses. Enter this amount on line 19, Form
NJ-1040. If the netted amount is a loss, enter zero here and make no entry on line 19, Form NJ‑1040.

Part-Year Residents. Include only the amounts you received while you were a resident of New Jersey.

Line 20a – Taxable Pension, Annuity, and
IRA Distributions/Withdrawals
Retirement income such as pensions, annuities, and certain
IRA withdrawals is taxable in New Jersey. The New Jersey
taxable amount may be different from the federal amount. Enter the taxable portion on line 20a.
Common types of taxable retirement income:
•• Pensions from the private sector;
•• Federal, state, and local government, and teachers’
pensions;
•• Keogh Plan distributions;
•• 401(k) Plan distributions;
•• Early retirement benefits;
•• Amounts reported as pension on Schedule NJK-1, Partnership Return Form NJ-1065;
•• Civil Service pensions and annuities, even if based on
credit for military service. These are received from the
U.S. Office of Personnel Management.

Common types of nontaxable retirement income (do not report
on this return):
•• Social Security benefits;
•• Railroad Retirement benefits;
•• Public or private disability pension benefits until the year
you turn 65. Beginning with the year you turn 65, the
benefits are treated as ordinary pension income;
•• U.S. Military pensions and survivor’s benefit payments.
(Most are received from the U.S. Department of Finance
and Accounting Service.)

Part-Year Residents. Include only the taxable amounts
you received while you were a resident of New Jersey.
Types of Retirement Plans

Retirement plans are either noncontributory or contributory.
Noncontributory. You made no contributions to your plan.
Amounts you receive from these plans are fully taxable. Enter
the amount from your 1099-R on line 20a.

2023 Form NJ-1040
Contributory (Other Than IRAs). You made contributions
to your plan. Contributions are usually made through payroll
deductions and, in general, are taxed when they are made.
Contributions made to a retirement plan (other than a 401(k)
Plan) prior to moving to New Jersey are considered to have
been previously taxed. These plans also may include employer
contributions and earnings, which have not been taxed.
Since you have already been taxed on your contributions, you
must determine which portion of your distribution is taxable
and which is excludable. There are two methods of calculating
the taxable and excludable amounts: Three-Year Rule Method
and General Rule Method. To determine which method to use,
complete Worksheet A below the year you begin receiving
pension and annuity payments.
Note: If you received a distribution from a 401(k) Plan, do
not complete Worksheet A. See the section on 401(k) Plans on
page 15. If you made a withdrawal from an IRA, do not complete Worksheet A or B. Instead, complete Worksheet C. See
the section on IRAs on page 15.

13

Three-Year Rule Method. Use this method if you will recover all your contributions within 36 months from the date
you receive your first payment from the plan, and both you and
your employer contributed to the plan.
Do not report pension and annuity payments as income on
line 20a until you have recovered all of your contributions.
Instead, report these amounts on line 20b. Once you have recovered your contributions, the payments you receive are fully
taxable and must be reported on line 20a.
General Rule Method. You must use this method if you will
not recover your contributions within 36 months from the
date you receive your first payment from the plan or if your
employer did not contribute to the plan. Part of your pension
is excludable and part is taxable every year. The excludable
amount represents your contributions. Complete Worksheet B
in the year you receive your first payment from the plan
and keep it for your records. You will need it for calculations in future years. Recalculate the percentage on line 3 of
Worksheet B only if your annual pension payments decrease.

Worksheet A

Which Pension Method to Use
1.	 Amount of pension you will receive during the first three years (36 months) from
the date of the first payment ............................................................................................................................ 1. _____________
2.	 Your contributions to the plan . ....................................................................................................................... 2. _____________
3.	 Subtract line 2 from line 1 .............................................................................................................................. 3. _____________
(a)	 If line 3 is “0” or more, and both you and your employer contributed to the plan, you can use the Three-Year Rule Method.
(b)	 If line 3 is less than “0,” or your employer did not contribute to the plan, you must use the General Rule Method.
(Keep for your records)

Worksheet B

General Rule Method
1.	 Your previously taxed contributions to the plan .............................................................................................
2.	 Expected return on contract* ..........................................................................................................................
3.	 Percentage excludable (Divide line 1 by line 2) .............................................................................................
4.	 Amount received this year ..............................................................................................................................
5.	 Amount excludable (Multiply line 4 by line 3)
Enter here and on line 20b, Form NJ-1040 .....................................................................................................
6.	 Taxable amount (Subtract line 5 from line 4.
Enter here and on line 20a, Form NJ-1040) . ..................................................................................................

1. _____________
2. _____________
3. _____________%
4. _____________
5. _____________
6. _____________

*The expected return on the contract is the amount receivable. If life expectancy is a factor under your plan, you must use federal
actuarial tables to calculate the expected return. The federal actuarial tables are contained in the Internal Revenue Service’s Publication 939, General Rule for Pensions and Annuities. Contact the IRS for this publication. If life expectancy is not a factor under
your plan, the expected return is found by totaling the amounts to be received.
(Keep for your records)

14

2023 Form NJ-1040

Worksheet C

IRA Withdrawals
Part I – Calculating Taxable and Excludable Amounts				
1.	 Value of IRA on 12/31/23.
Include contributions made for the tax year from 1/1/24 – 4/15/24.....................................1. 	 _ _______________________
2.	 Total distributions from IRA during the tax year. Do not include tax-free rollovers...... 2.	 _ _______________________
3.	 Total Value of IRA. Add lines 1 and 2................................................................................3.	 _ _______________________
Unrecovered Contributions:
Complete either line 4a or 4b. Then continue with line 5.	 			
4a.	 First year of withdrawal from IRA:
Enter the total of IRA contributions that were previously taxed..........................................4a.	 _ _______________________
4b.	 After first year of withdrawal from IRA:
Complete Part II. Enter amount of unrecovered contributions from line 15..........................4b.	 _ _______________________
5.	 Accumulated earnings in IRA on 12/31/23.
Subtract either line 4a or 4b from line 3. ............................................................................5.	 _ _______________________
6.	 Divide line 5 by line 3. (Enter the result as a decimal.).......................................................6.	 _ _______________________
7.	 Taxable portion of this year’s withdrawal. Multiply line 2 by decimal amount on
line 6. Enter here and on line 20a, Form NJ-1040...............................................................7.	 _ _______________________
8.	 Excludable portion of this year’s withdrawal. Subtract line 7 from line 2. Enter
here and on line 20b, Form NJ-1040....................................................................................8.	 _ _______________________
				
Part II – Unrecovered Contributions (For Second and Later Years)
See Part III if you did not complete Worksheet C in prior years.				
9.	 Last year’s unrecovered contributions. From line 4 of last year’s Worksheet C.............9.	 _ _______________________
10.	 Amount withdrawn last year. From line 2 of last year’s Worksheet C.............................10.	 _ _______________________
11.	 Taxable portion of last year’s withdrawal. From line 7 of last year’s Worksheet C......... 11.	 _ _______________________
12.	 Contributions recovered last year. Subtract line 11 from line 10.....................................12.	 _ _______________________
13.	 This year’s unrecovered contributions. Subtract line 12 from line 9...............................13.	 _ _______________________
14.	 Contributions to IRA during current tax year. Do not include tax-free rollovers..........14.	 _ _______________________
15.	 Total unrecovered contributions. Add lines 13 and 14. Enter here and on line 4b..........15.	 _ _______________________
Part III – Unrecovered Contributions (For Second and Later Years)
Complete this section only if you did not complete Worksheet C in prior years.
Calculate the amount of unrecovered contributions as follows:				
16.	 Total amount of withdrawals made from the IRA in previous years..................................16.	 _ _______________________
17.	 Total of previous year withdrawal(s) already reported as income on prior
New Jersey tax returns.........................................................................................................17.	 _ _______________________
18.	 Contributions already recovered. Subtract line 17 from line 16..........................................18.	 _ _______________________
19.	 Unrecovered contributions. Subtract line 18 from the total amount of
contributions made to the IRA. Enter here and on line 4b..................................................19.	 _ _______________________
(Keep for your records)

2023 Form NJ-1040
Lump-Sum Distributions and Rollovers

When you receive a lump-sum distribution of the entire
balance from a qualified employee pension, annuity, profitsharing, or other plan, any amount that exceeds your previously taxed contributions must be included in your income in
the year received. New Jersey has no provision for income averaging of lump-sum distributions. Report the taxable amount
on line 20a and the excludable amount on line 20b.
If you roll over a lump-sum distribution from an IRA or a qualified employee pension or annuity plan into an IRA or other
eligible plan, do not report the rollover on line 20a or 20b if
it qualifies for deferral for federal tax purposes. The amount
rolled over (minus previously taxed contributions) will be taxable when it is withdrawn.

401(k) Plans

1.	 Contributions made on or after January 1, 1984, were not
taxed when they were made. If all of your contributions were
made on or after that date, your distributions are fully taxable
unless your contributions exceed the federal limit. If your
contributions exceed the federal limit, you must calculate the
taxable and excludable portions of your distributions using
one of the methods described under contributory plans.
2.	 Contributions made before January 1, 1984, were taxed
when they were made. If you made contributions before
that date, you must calculate the taxable and excludable
portions of your distributions using one of the methods described under contributory plans.
For more information on pension and annuity income, see
GIT-1 & 2, Retirement Income.

IRAs

Your IRA consists of contributions, earnings, and certain
amounts rolled over from pension plans. In general, your contributions were taxed when they were made and are not taxable when you make a withdrawal. All the earnings and any
amounts rolled over tax-free are taxable when withdrawn.
Use Worksheet C to calculate the taxable and excludable portions of your IRA withdrawal. If you made withdrawals from
multiple IRAs, you can use a separate worksheet for each or
combine all IRAs on one worksheet.
Lump-Sum Withdrawal. If you withdraw the total amount
from an IRA, all the earnings and any amounts rolled over taxfree are taxable. You must report these amounts in the year you
make the withdrawal.
Periodic Withdrawals. If you make withdrawals over a
period of years, the part of the annual distribution that represents earnings is taxable. The amount taxable for New Jersey
purposes may be different from the amount you report on your
federal return.

15

For more information on IRA withdrawals, see GIT-1 & 2,
Retirement Income.

Roth IRAs

Your contributions to a Roth IRA were taxed by New Jersey
when they were made. Distributions from a Roth IRA that meet
the requirements of a qualified distribution are excludable. Do
not include qualified distributions on Form NJ-1040. If you received a nonqualified distribution, you must report the earnings
on line 20a, and report the excludable portion on line 20b. A
distribution that is considered nonqualified for federal purposes
is also considered nonqualified for New Jersey purposes.
If you converted an existing IRA to a rollover Roth IRA during
Tax Year 2023, any amount from the existing IRA that would
be taxable if withdrawn must be included on line 20a.
For more information on Roth IRAs, see Technical Bulletin
TB-44.

Line 20b – Excludable Pension, Annuity,
and IRA Distributions/Withdrawals

Enter the excludable portion of any distribution you received
from a contributory pension, annuity, or IRA. This is the portion of the total distribution that was not reported on line 20a.
This amount represents your previously taxed contributions.
Three-Year Rule Method. Include the full amount received
until you have recovered all of your contributions.
General Rule Method. Include the amount from Worksheet B,
line 5.
IRA withdrawal. Include the amount from Worksheet C,
line 8. If you converted an existing IRA to a rollover Roth
IRA, report the excludable portion on this line.
Lump-Sum Distribution. If you received a lump-sum distribution from a pension, annuity, or IRA, report the excludable
portion on this line.
For more information, see GIT-1 & 2, Retirement Income.

Part-Year Residents. Include only the amounts you received while you were a resident of New Jersey.

Line 21 – Distributive Share of
Partnership Income

Complete Part II of Schedule NJ-BUS-1 and enter on line 21
the amount from line 4 of Part II. If the amount on line 4 is a
loss, make no entry on line 21. See instructions on page 17.
Enclose Schedule NJ-BUS-1 and a copy of
Schedule NJK-1, Form NJ-1065, for each
partnership with your return. If you did not

2023 Form NJ-1040

16

receive a Schedule NJK-1, enclose a copy of the federal
Schedule K-1.

S corporation with your return. If you did not receive a Schedule NJ-K-1, enclose a copy of the federal Schedule K-1.

Line 22 – Net Pro Rata Share of S
Corporation Income

Line 23 – Net Gains or Income From
Rents, Royalties, Patents, and Copyrights

Complete Part III of Schedule NJ-BUS-1 and enter on line 22
the amount from line 4 of Part III. If the amount on line 4 is a
loss, make no entry on line 22. See instructions on page 17.

Complete Part IV of Schedule NJ-BUS-1 and enter on line 23
the amount from line 4 of Part IV. If the net amount is a loss,
make no entry on line 23. See instructions on page 18.

Enclose Schedule NJ-BUS-1 and a copy of
Schedule NJ-K-1, Form CBT-100S, for each

Enclose Schedule NJ-BUS-1 with your
return.

Schedule NJ-BUS-1

Business Income Summary Schedule
Part I – Net Profits From Business

Report the net profits or loss from your business, trade, or profession.
Make the following adjustments to your federal Schedule C (or C-EZ or F):
1.	 Add any amount you deducted for taxes based on income;
2.	 Subtract interest you reported on federal Schedule C (or C-EZ or F) that is exempt for New Jersey purposes but taxable for federal purposes;
3.	 Add interest not reported on federal Schedule C (or C-EZ or F) from states or political subdivisions outside New Jersey that is
exempt for federal purposes;
4.	 Deduct meal and entertainment expenses that constitute ordinary expenses incurred in the conduct of a trade or business but that
were not allowed on the federal return;
5.	 Deduct your qualified contributions to a self-employed 401(k) Plan. Contributions that exceeded the federal limits are not deductible for New Jersey purposes;
6.	 Add interest and dividends derived in the conduct of a trade or business;
7.	 Add or subtract income or losses derived in the conduct of a trade or business from rentals, royalties, patents, or copyrights;
8.	 Add or subtract gains or losses from the sale, exchange, or other disposition of the trade or business’s property;
9.	 Add or subtract the net adjustment from the Gross Income Tax Depreciation Adjustment Worksheet GIT-DEP, Part I, line 7;
10.	 Cannabis licensees: Deduct expenses that would have been eligible to be claimed as a deduction for federal purposes but were
disallowed because cannabis is a controlled substance under federal law.
If you are a sole proprietor who provides primary care services in a qualified medical or dental practice you own that is located in or
within five miles of a designated Health Enterprise Zone (HEZ), you may be able to deduct a percentage of the net income from that
practice on line 34. See Technical Bulletin TB-56 for eligibility requirements and instructions for calculating the HEZ deduction.

Lines 1–3

For each business, enter the following information. If you need more space, enclose a statement with the return listing any additional
businesses and the related profit or loss.
•• Business name as listed on Schedule C, C-EZ, or F
•• Social Security number or federal employer identification number (EIN)
•• Profit or (loss) as adjusted for New Jersey purposes

2023 Form NJ-1040

17

Line 4

Add the amounts in the Profit or (Loss) column and enter the total on line 4, netting profits with losses. Enter this amount on line 18,
Form NJ-1040. If the netted amount i