New Jersey Estimated Tax Payment vs Safe Harbor

[catdelta]

Hi there,

NJ has two tax codes.

1. If you estimate that you will owe more than $400 in NJ income tax after subtracting withholdings, estimated payments is required.

2. NJ's safe harbor is 100% (or 110%) of last year’s tax or 80% of the current year’s tax.

Am I right that if I meet the safe harbor from my withholdings (salary), I can ignore the estimated payment generated from my capital gain?  Though I should make estimated payments according to #1, there would be no penalty if I only pay them at 4/15 next year according to #2.

Thank you very much.

[catdelta]

Does anyone have experience dealing with this?  Thanks again.

[RobertB4444]

New Jersey is pretty severe about that $400 thing.  If you think that you are going to owe more than $400 then you should probably either send an estimate or adjust the withholding on your paycheck to cover your capital gains.