I received a state gross income tax adjustment. It does not recognize my Schedule A deductions for business expenses not reimbursed. What should I do?

You wrote - " It does not recognize my Schedule A deductions for business expenses not reimbursed."

 

Business expenses are

Never

entered on a Schedule A on a federal tax return.  

If you are a sole proprietor/independent contractor where you business is an IRS disregarded entity then

ALL

you business expenses are reported on a Schedule C which is included with and part of your personal tax return, Form 1040.

correction, not Schedule A and is my state return, NJ. Form is 2016EZ attachment to 1040. Done automatically by TurboTax

are you an employee (W-2)  or are you independent contractor (schedule C).    if you were an employee, such expenses weren't deductible for state purposes in 2016.  

• New Jersey does not allow you to exclude from wages amounts you contribute to deferred compensation and retirement plans, other than 401(k) Plans.
• New Jersey does not allow you to deduct moving expenses or employee business expenses from wages, although you can exclude reimbursements for certain expenses if they are included in wages on your W-2.
• 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.