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Category: New Jersey

New Jersey Income Subject to Tax

Net Gambling Winnings

New Jersey Lottery winnings from prize amounts exceeding $10,000 are taxable for New Jersey gross income tax purposes. The individual prize amount, not the total amount of New Jersey Lottery winnings over the year, determines taxability.

Enter on Line 23 the amount of your net gambling winnings. You may deduct your gambling losses from your winnings that occurred during the same year. You may use New Jersey Lottery losses to offset other gambling winnings. If your net gambling winnings are less than zero, make no entry.

You must be able to substantiate gambling losses used to offset winnings reported on your New Jersey income tax return. Evidence of losses may take several forms, including a daily log or journal of wins and losses, canceled checks, losing race track pari-mutuel tickets, losing lottery tickets, etc. With respect to winnings or losses resulting from casino gambling, letters from casinos which purport to "rate" the gambling activity of an individual or "estimate" losses are acceptable as part of the evidential material required to prove losses. Note: Do not include any winnings from prizes in the amount of $10,000 or less from the New Jersey State Lottery.

Although no specific rider to the New Jersey income tax return is required to substantiate gambling losses, it is suggested that if you enter gambling winnings net of losses on Line 23 of the return, you should note the total winnings and total losses on a supporting schedule. This procedure may eliminate certain questions in the event the return is selected for audit.

Military Pension or Survivor’s Benefit Payments Adjustment

If you are receiving a United States military pension or survivor's benefits payments, the military pension or survivor's benefit is not taxable for New Jersey gross income tax purposes, regardless of your age or disability status.

Military pensions are those resulting from service in the Army, Navy, Air Force, Marine Corps, or Coast Guard. This exemption does not apply to civil service pensions or annuities, even if the pension or annuity is based on credit for military service. Most military pensions and survivor’s benefit payments are received from the U.S. Defense Finance and Accounting Service while a civil service annuity is received through the U.S. Office of Personnel Management.

Taxable Amount of Scholarships Included on Federal Return

Scholarships and fellowship grants are taxable and must be included on Line 25 unless they satisfy all of the following conditions:

  1. The primary purpose of the grants is to further the recipients’ education or training; and
  2. The grant neither represents payments for past, present, or future services nor payments for services which are subject to the direction or supervision of the grantor (e.g. a fellowship given in exchange for teaching); and
  3. The grant is not for the benefit of the grantor.

NJ 1065- K1

Enter your share of income derived from partnership(s) as reported to you by the partnership(s) on Schedule NJK-1, Form NJ-1065. The appropriate amount to enter appears on the schedule in column A of the line labeled "Distributive Share of Partnership Income" and must be reported whether or not the income was actually distributed. If the net amount from all Schedule NJK-1s is zero or less, make no entry. Enclose a copy of each Schedule NJK-1 with your return. For detailed information regarding reporting partnership income, see Tax Topic Bulletin GIT-9P, Income From Partnerships.

NJ 1120S – K1

Enter on Line 21 the amount of your net pro rata share of S corporation income, whether or not the income was actually distributed. For detailed information regarding the reporting of S corporation income, see Tax Topic Bulletin GIT-9S, Income From S Corporations.