New Jersey Tax Law Changes for 2017/2018

February 6, 2018 News

Veterans Exemption

Starting in 2017, individuals who or honorably discharged from active duty in the Armed Forces, Reserves or National Guard on the last day of the tax year are eligible for an additional $3,000 exemption. The exemption needs to be certified by mailing, faxing or uploading the documentation prior to filing the individual’s return.

 

Sales and Use Tax Reductions

Sales tax rate reduced to 6.625% from 6.875%, effective 1/1/18.

 

Retirement Exclusions

The retirement income exclusion for those who are over 62 years old and have gross income of $100,000 or less, increases every year starting with the 2017 tax year.

 

Federal Bonus and Section 179 Deprecation Rules

The Federal Tax Cuts and Jobs Act will allow a deduction of 100% of the cost for certain property placed in service after September 27, 2017. New Jersey will not follow this law. Taxpayers will need to add back the 100% federal bonus amount.

As previously enacted 179 Depreciation is still limited to $25,000.

 

Estate Taxes

On 1/1/17, the New Jersey Estate Tax exemption increased from $675,000 to $2 million. This means that NJ residents dying in 2017 could leave up to a $2 million estate to their heirs without being subject to the NJ Estate Tax.

On January 1, 2018, the New Jersey Estate Tax is eliminated for those who die on or after that date.

 

Credits

Angel Investor Tax Credit has been revised for a qualified investment in NJ emerging technology business holding company as long as 100% of the investment is transferred. The credit is being applied retroactively to qualified investments made for tax years beginning on or after January 1, 2012.

Business Employment Incentive Program Credit is new for businesses. See Form 324.

Public Infrastructure Credit is also new. See Form 325.