NJ Retirement Income Exclusion

[Tax1998]

It appears that TT is allowing a full utilization of the NJ Retirement Income Exclusion for a married couple where the spouse earning the income is not currently age eligible, but the non earning spouse is over age 62.

Based on my understanding of the law, TT should not consider the portion of the under age 62 retirement income as eligible for the exclusion.

Please advise?

[fanfare]

You qualify for all or some of the pension exclusion if:

• 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);
• Your total income for the entire year was $150,000 or less.

The income limit was raised in 2021.

[Tax1998]

Thank you for your reply!

There remains a bit of a struggle with parsing the following language:

When you and your spouse/civil union partner file a joint return and only one of you is 62 or older or disabled, you can still claim the maximum pension exclusion. However, you can exclude only the pension, annuity, or IRA withdrawal of the qualified spouse/civil union partner.

I am reading the last sentence to suggest that a "qualified" spouse must be 62 or older meaning if the under 62 spouse received the pension/IRA income, it would not qualify for exclusion.

Appreciate your thoughts

[fanfare]

"Joint Filers: If only one spouse
is 62 or older or disabled, enter
only the pension income of that
spouse. You cannot exclude the
pension income of the spouse
who is younger than 62 and not
disabled."

[fanfare]

The older person's pension, only, should appear on Line 28a.

Because of the way the exclusion amount is calculated, if you don't have earned income, you can get a larger exclusion than that.

Pension income is not earned income.

[Tax1998]

Thanks

Agree - it seems as if TT is not distinguishing the individual spouses for this purpose. I believe they need to patch the program to fix this issue since the only way you can specify the correct spouse is by coding the 1099-R by recipient which I have done.