I am also having the same problem.
NJ Filing error: Not Eligible for Electronic Filing
Returns with Pass-Through Business Alternative Income Tax Credit are not eligible for electronic filing.
I did some digging around after I saved my NJ tax file as a pdf. I also downloaded the NJ 1040 Tax instructions to see what this Pass-Through Business Alternative Income Tax Credit is. This amount will be shown on Line 62 of the NJ-1040. The amount comes from Schedule NJ-BUS-1, Part II, line 5; Schedule NJ-BUS-1, Part III, line 5; or from Schedule NJK-1.
This is my situation:
- I have a timeshare, for 5 weeks, that I rented out in 2021. The rental generated income. IT IS NOT A BUSINESS.
- I reported the rental income on my Federal Tax, Schedule 1, Additional Income, line 5 and 10. Then the rental income is put on my Federal Tax, in my case, 1040-SR Line 8, Other income.
I start my NJ Tax return and TT transfers information from my Federal Tax return to my NJ Tax return.
- I now see that since the rental is considered income, that income is shown on Schedule NJ-BUS 1, as RENT; and Schedule NJ BUS-2, as RENT. IT IS NOT A BUSINESS.
- I see that on my NJ-1040, this rental income is reported on Line 23, Net Gains or income from rents...(NJ-BUS-1, Part IV, line 4). IT IS NOT A BUSINESS.
- I see on my NJ-1040, Line 62, Pass-Through Business Alternative Income Tax Credit, that it is blank, no value shown, therefore it is zero. IT IS NOT A BUSINESS.
I believe the message appears because I show an income value on NJ BUS-1 and NJ BUS-2, although IT IS NOT A BUSINESS. I wonder, in order to avoid that NJ "Not Eligible for Electronic Filing" message, that TT Software developers also check for a value on Line 62 of the NJ-1040. If Line 62 is blank, no value, zero, then there should be the capability to e-file the NJ Tax return, even though there is a value shown on NJ BUS-1, NJ BUS-2.
I believe it is a TT issue with checks and transfers of data from Federal Tax information into the NJ tax forms.
Also on the first page of my NJ Tax return, I also have the following incorrect information: Federal extension filed, The address above is a foreign address, Your address has changed, Death Certificate is enclosed, Do not want a paper form next year, I authorize the Division of Taxation to discuss my return and enclosures with my preparer, NJ-1040-O enclosed.
