INCOME SUBJECT TO TAX BY NEW JERSEY
Taxpayer B With | ||
Taxpayer A | Pension Less | |
Without Pension | Exclusion(s) | |
Wages | $ 70,000 | |
Interest | $ 250 | $ 4,000 |
Dividends | $ 400 | $ 2,500 |
Gains | $ 1,525 | |
Pension/Annuity/IRA | 0 | $ 30,000 |
Pension Exclusion | 0 | ($ 15,000) |
Taxable Pension | $ 15,000 | |
S Corporation Income | $ 21,000 | 0 |
Income Subject to Tax Before | $ 91,650 | $ 23,025 |
Exemptions and Deductions
New Jersey | Other State | Other City | |
Wages | $ 45,000 | $ 30,000 | $ 30,000 |
Income Subject to Tax | $ 45,000 | $ 30,000 | $ 30,000 |
Before Exemptions and | |||
Deductions | |||
Less Exemptions | ($ 2,000) | ||
New Jersey Taxable Income | $ 43,000 | ||
Tax | $ 683 | $ 1,600 | $ 135 |
Numerator of the Credit | $ 30,000 | ||
Calculation |
New Jersey | New York | Delaware | |
Wages | $ 20,000 | $ 12,000 | $ 8,000 |
Interest | $ 1,000 | ||
Dividends | $ 2,000 | ||
New York Adjustments | ($ 1,500) | ||
Income Subject to Tax | $ 23,000 | $ 10,500 | $ 8,000 |
Before Exemptions and | |||
Deductions | |||
Less Exemptions | ($ 2,000) | ||
New Jersey Taxable Income | $ 21,000 | ||
Tax | $ 298 | $ 600 | $ 130 |
Numerator of the Credit | ($ 10,500) | ($ 8,000) | |
Calculation |
INCOME SUBJECT TO TAX
Other | |||
New Jersey | Jurisdiction | Both | |
Wages | $ 125,000 | $ 100,000 | $ 100,000 |
Income Subject to Tax | $ 125,000 | $ 100,000 | $ 100,000 |
Before Exemptions and Deductions | |||
Less Exemptions | ($ 1,000) |
New Jersey Taxable Income | $ 124,000 | |
Tax | $ 5,773 | $ 4,800 |
Numerator of the Credit | $ 100,000 | |
Calculation |
INCOME SUBJECT TO TAX
Other | |||
New Jersey | Jurisdiction | Both | |
Wages | $ 12,500 | $ 12,500 | $ 12,500 |
Interest | $ 2,000 | ||
Dividends | $ 3,000 | ||
Capital Gains | $ 21,000 | ||
Income Subject to Tax | $ 38,500 | $ 12,500 | $ 12,500 |
Before Exemptions and | |||
Deductions | |||
Less Exemptions | ($ 2,500) | ||
New Jersey Taxable Income | $ 36,000 | ||
Tax | $ 560 | $ 400 | |
Numerator of the Credit | $ 12,500 | ||
Calculation |
INCOME SUBJECT TO TAX
New Jersey | Philadelphia | Both | |
Wages | $ 500,000 | $ 500,000 | |
Less 401(k) Contributions | ($ 30,000) | $ 470,000 | $ 470,000 |
Interest | $ 100,000 | ||
Dividends | $ 200,000 | ||
Income Subject to Tax | $ 770,000 | $ 500,000 | $ 470,000 |
Before Exemptions and Deductions | |||
Less Exemptions | ($ 1,000) | ||
Medical Deduction | ($ 5,000) | ||
New Jersey Taxable | $ 764,000 | ||
Income | |||
Tax | $ 51,488 | $ 18,858 | |
Numerator of Credit | $ 470,000 | ||
Calculation |
Calculation of tax paid to other jurisdiction on wages taxed by both New Jersey and other jurisdiction.
Wages taxed by both jurisdictions | $ 470,000 = 94% of wages are allowable in numerator |
Wages taxed by Philadelphia | $ 500,000 |
Tax paid to Philadelphia | $ 18,858 |
Adjustment % | x 94% |
Actual tax paid on wages allowable in numerator | $ 17,727 |
Calculation of Maximum Credit Allowable | |
470,000 | |
X 51,488 = 31,428 maximum credit allowable | |
770,000 | |
Actual tax paid on wages allowable in numerator 17,727 | |
Credit allowed is 17,727, the lower of the maximum credit allowable or the actual tax paid to the other jurisdiction on income taxed by both New Jersey and the other jurisdiction. |
INCOME SUBJECT TO TAX
New Jersey | State 1 | State 2 | |
Wages | $ 100,000 | ||
Interest | $ 200 | ||
Partnership Income | |||
Partnership ABC $ 10,000 | $ 10,000 | ||
Partnership XYZ $ 5,000 | $ 5,000 | ||
Partnership KLM $ 7,000 | |||
Partnership GSS ($ 12,000) | $ 10,000 | ||
Income Subject to Tax Before | $ 110,200 | $ 10,000 | $ 5,000 |
Exemptions and Deductions | |||
Less Exemptions | ($ 1,000) | ||
New Jersey Taxable Income | $ 109,200 | ||
Tax | $ 4,830 | $ 650 | $ 150 |
Effective Tax Rate | 6.50% | 3.00% | |
Numerator of Credit | $ 10,000 | 0 | |
Calculation |
INCOME SUBJECT TO TAX
New Jersey | New York | UBT | |
Wages | $ 25,000 | ||
Interest | $ 15,000 | ||
Dividends | $ 10,000 | ||
Capital Gains | $ 25,000 | ||
Net Profits from Business | $ 100,000 | $ 75,000 | $ 100,000 |
Income Subject to Tax Before | $ 175,000 | $ 75,000 | $ 100,000 |
Exemptions and Deductions | |||
Less Exemptions | ($ 2,000) | ||
New Jersey Taxable Income | $ 173,000 | ||
Tax | $ 6,978 | $ 6,600 | $ 4,000 |
Numerator of the Credit | $ 75,000 | $ 25,000 | |
Calculation |
New Jersey | New York | UBT | |
Wages | $ 50,000 | $ 25,000 | |
Interest | $ 10,000 | ||
Dividends | $ 20,000 | ||
Capital Gains | $ 15,000 | ||
Partnership Income | $ 200,000* | $ 100,000** | $ 110,000*** |
Keogh deduction | ($ 10,000) | ||
Income subject to tax Before | $ 285,000 | $ 115,000 | $ 110,000 |
Exemptions and Deductions | |||
Exemptions | ($ 2,000) | ||
New Jersey Taxable income | $ 283,000 | ||
Tax | $ 16,980 | $ 7,475 | $ 4,400 |
Numerator of the Credit | $ 115,000 | $ 10,000**** | |
Calculation |
* | Partnership Income per Federal K-1 | |
Ordinary Income | $ 200,000 | |
** | 50% of partnership income allocated to New York State | $ 100,000 |
*** | UBT partnership Income | |
50% of Ordinary Income | $ 100,000 | |
UBT adjustments not required for Federal or | ||
New Jersey purposes | $ 10,000 | |
Total UBT | $ 110,000 | |
**** | UBT Credit Numerator | |
Total Partnership Income Amount used in determining New York State | $ 110,000 | |
credit | ($ 90,000) | |
Income not taxed by New Jersey | ($ 10,000) | |
Allowable Numerator | $ 10,000 |
INCOME SUBJECT TO TAX
Other | |||
New Jersey | Jurisdiction | Both | |
Wages | $ 100,000 | ||
Interest | |||
Personal Interest | $ 200 | ||
S Corporation Interest | $ 2,500 | $ 2,500 | |
S Corporation Income | |||
Ordinary 35,000 | $ 35,000 | $ 35,000 | |
Interest 2,500 | $ 37,500 | ||
Income Subject to Tax Before | $ 137,700 | $ 37,500 | $ 37,500 |
Exemptions and Deductions | |||
Less Exemptions | ($ 1,000) | ||
New Jersey Taxable Income | $ 136,700 | ||
Tax | $ 6,582 | $ 2,625 | |
Numerator of the Credit | $ 37,500 | ||
Calculation |
INCOME SUBJECT TO TAX
New Jersey | Other Jurisdiction | Both | |
Wages | $ 100,000 | $ 100,000 | $ 100,000 |
Interest | $ 200 | ||
Net Profits from 35,000 | $ 25,000 | $ 25,000 | |
Business | |||
Taxes Based on 1, 000 | $ 36,000 | $ 1,000 | $ 1,000 |
Income | |||
Income Subject to Tax Before | $ 136,200 | $ 126,000 | $ 126,000 |
Exemptions and Deductions | |||
Less Exemptions | ($ 1,000) | ||
New Jersey Taxable Income | $ 135,200 | ||
Tax | $ 6,486 | $ 8,820 | |
Numerator of the Credit | $ 126,000 | ||
Calculation |
INCOME SUBJECT TO TAX
New Jersey | PA Income | Phila BPT | Phila NPT | |
Wages | $ 100,000 | |||
Interest | $ 200 | |||
Partnership ABC | $ 500,000 | $ 225,000 | $ 275,000 | $ 275,000 |
Income Subject to Tax Before | $ 600,200 | $ 225,000 | $ 275,000 | $ 275,000 |
Exemptions and Deductions | ||||
Less Exemptions | ($ 1,000) | |||
New Jersey Taxable Income | $ 599,200 | |||
Tax Liability | $ 36,043 | $ 6,300 | $ 17,875 | $ 10,909 |
Less BPT Credit (17,875 x 60%) | ($ 10,725) | |||
Tax | $ 36,043 | $ 6,300 | $ 17,875 | $ 184 |
Effective Tax Rate | 2.80% | 6.50% | 0.067% | |
Actual tax paid to other | ||||
jurisdiction | ||||
PA State Tax | $ 6,300 | |||
Phila BPT | $ 17,875 | |||
Phila NPT | $ 184 | |||
$ 24,359 | ||||
Numerator of Credit Calculation | $ 275,000 |
New Jersey | New York | Both | |
Wages | $ 140,000 | $ 80,000 | $ 80,000 |
Interest | $ 80,000 | ||
Dividends | $ 20,000 | ||
Capital gains | $ 10,000 | ($ 3,000)* | ($ 3,000) |
Partnership Income | $ 340,000* | $ 200,000 | $ 170,000** |
Other Deductions | $ 25,000*** | ($ 10,000)**** | |
Less Exemptions | $ 2,000 | ||
Medical deduction | $ 8,000 | ||
Taxable Income | $ 580,000 | $ 255,000 | |
Tax | $ 34,983 | $ 15,300 | |
Numerator of Credit | $ 237,000 | ||
Calculation Credit Allowed | $ 14,052 |
* | Partnership Income per Federal K-1 Additional expenses/deductions allowed: | $ 400,000 |
401(k) deduction | $ 30,000 | |
Excess meals & entertainment | $ 10,000 | |
Club dues | $ 10,000 | |
Miscellaneous partner expenses | $ 10,000 | |
New Jersey partnership income | $ 340,000 - 50% allocated to New Jersey | |
** | New York allocated share of partnership income $ 340,000 X 50% = $ 170,000 | |
*** | New York other deductions 401(k) $ 15,000 Keogh $ 10,000 | |
**** | Other deductions used in determining the numerator New York Keogh adjustment of $ 10, 000. | |
The New York 401(k) deduction of $ 15,000 was used in arriving at the New York partnership adjusted income of $ 170,000 | ||
Maximum Credit Allowable: | ||
($ 240,000 X $ 34,983) /$ 580,000 = $ 14,476 | ||
Tax paid to New York on $ 255,000 of income $ 15,300 | ||
Tax paid to New York on $ 240,000 of income same as taxed by | ||
New Jersey $ 14,400, calculated as follows: | ||
($ 240,000 X $ 15,300) /$ 255,000 = $ 14,400 | ||
Credit allowed is the lower of the allocation formula or the tax paid to the other jurisdiction on the same income taxed by New Jersey, $ 14,000. |
N.J. Admin. Code § 18:35-4.1