Do not check the special handling box for interest on savings accounts, checking accounts, and certificates of deposit (CDs) received from a bank, credit union, or savings and loan association, including interest received from a bank, credit union, or savings and loan association located online or located in New Jersey.
You need to Check the special handling box and in the dropdown list for interest that is taxable on your federal return but tax-exempt in New Jersey.
Exempt interest income include:
- Interest and gains from government debt obligations (such as bonds) of the State of New Jersey or its political subdivisions. These subdivisions can include municipalities, counties, school districts and authorities;
- Interest and gains from debt obligations of the federal government, such as U.S. Savings Bonds and Treasury Bills;
- Certain distributions from New Jersey Qualified Investment Funds.
- Distributions from mutual funds on interest earned from federal debt;
- Earnings on distributions from qualified State tuition programs. This includes the New Jersey Better Educational Savings Trust (NJBEST) program; and
- Earnings on tuition savings programs formed under Section 529A of the Internal Revenue Code. This includes the State’s Achieving a Better Life Experience (ABLE) program.
Nontaxable Investment Income
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