You are correct. It seems that with the IT 201 everything flows easily which is not the case of our 1040 NJ Tax Return Form.
As a matter of fact, we have two lines on such Form: Line 20a) for pension, annuities IRA and the like and Line 27 for other incomes.
The instruction for Line 20a) indicating the incomes to be reported doesn’t mention specifically nothing regarding foreign pensions. This doesn’t mean of course that foreign pension should not be reported on Line 20a) but arises the doubt leaving the option to report it on Line 27 reserved for “other income” that is for any other income for which a place to report it cannot be found in such Form. So, there is room for interpretation.
The 1040 NJ Tax Return Instructions determine that retirements exclusions are related to the amount reported on Line 20a) if the taxpayer is 63 or older and his/ her income is below 150 k.
So, if a foreign pension is reported on Line 27 no exclusion is allowed .
Taking into account that NJ Taxation Regulatory Services Branch informed me in writing that :
“While the foreign source payments are considered taxable income, the income still may be excludable under the pension exclusion. Generally, a taxpayer can exclude all or part of the pension income reported when meeting the following conditions:
- You (and/or your spouse/civil union partner, if filing jointly) were 62 or older or disabled as defined by Social Security guidelines on the last day of the tax year (December 31 for calendar year filers); and
- Your total income for the entire year was $150,000 or less”
I assume that those new Jearseans that meet those two condition legally can report their foreign pensions on Line 20a) in order to get the exclusion .
Please let me know your comments .
