NJ Material participation loss on rentals still being considered passive

[maglib]

Hi all.  I had material participation for the first time on my 3 rental properties. I don't do 199A as they are net losses.  It worked fine in FED and in NY and I did indicate in fed they both active and over 750 hours .  NJ though still shows it as passive income and disallowing the losses.  Since it is material participation, it should not be passive income.   It is very material a $47k loss.  NJ Bus-1 won't allow the loss, it shows up under rental , nothing to adjust it to material and not passive income.

Yes I did in fact meet the 750 hours this year. We had major renovation on 1, 3 trips to Florida for a tenant we had to evict and unpaid rent most of the year who left damages and also major work there. 

[rjs · Accepted solution]

From the instructions for Schedule NJ-BUS-1:

"There is no distinction between active and passive losses for New Jersey purposes."

Furthermore, the New Jersey income tax does not allow a net loss in any category of income. You can offset losses against gains in the same category, but you cannot show a net loss in any income category, and you cannot apply a loss in one category against income in another category.

Schedule NJ-BUS-1, Part IV (rents, etc.), line 4 says "Net Income or (Loss). . . . Enter here and on line 23, NJ-1040. If loss, make no entry on line 23."