NJ 179 deduction

[samgott13]

Last year my daughter had a federal section 179 deduction of $690 for a dishwasher for her rental property.  New Jersey adjusted this amount to 138 with a 5 year lifetime.  How is the balance carried forward to this year's tax return?  So far there is no amount on the New Jersey return for the $138 depreciation this year.

[AmyC]

If she mistakenly claimed the 179 last year, an amended return is in order. With the expanded rules, she could qualify. 

If she does meet the rules, you need to make an adjustment in the NJ return to show the $138. Follow these steps:

1. Open to NJ return
2. continue through 
3. Look for Your Business Summary / Rental Real Estate
4. Edit
5. Make the necessary adjustments for NJ depreciation. My program shows the adjustment and yours might also.
6. You will claim $138 each year until the full amount is used.

Before you file, review your tax return and verify the Form GIT-DEP (depreciation adjustment worksheet) is part of your return. You will see GIT-DEP Pt 2 WK showing the NJ depreciation vs the federal in part II.

To print or view  your forms, including all worksheets:

• In desktop, switch to Forms Mode. 
• For online:
  1. On the left side, select  Tax Tools
  2. Select Print center
  3. Select Print, save or preview this year's return
  4. If you have not paid, select pay now

Reference:  IRS 4562 states: You can elect to expense part or all of the cost of section 179 property that you placed in service during the tax year and used predominantly (more than 50%) in your trade or business.

[samgott13]

Thanks for your reply.  I don't see that option in TurboTax Premier.  Instead I think I can do it by switching to Forms and adding a line to the 2025 NJ GIT-DEP worksheet.  I assume I put "0" in Column C as it was a Section 179 deduction in 2024.  Column D would have the original Federal basis of 690, as would Column F for the New Jersey basis.  Column G would be the 2024 Column K value of 138 (in future the total of the previous years' Column Ks).  Column H is Column D minus Column G.  Columns I and J and K are the same as from 2024's worksheet.  Unfortunately the worksheet instructions are rather rudimentary.  I am also unsure as to why the item did not qualify as a NJ Section 179 expense according to TurboTax.

[samgott13]

To be clear, this is on the NJ GIT-DEP Part 2 worksheet.

[samgott13]

Finally I just remembered we are not talking about a Section 179 deduction, but rather a Federal De Minimus Safe Harbor election.  That's why NJ doesn't allow the full deduction in one year.

[AmyC]

Tru,e but the steps are the same to get the depreciation entered on the NJ return. It should trigger the GIT DEP  showing $0 for federal depreciation and $138 for NJ. You may want to keep a copy of the GIT DEP with the permanent tax file. 

I am concerned this means you are not able to edit the rental and make the adjustments. If you are using the online program and failing, you need to switch to desktop. It picks up where you are but allows you to switch to FORMS mode and force the election.

If you need extra time, filing an extension by April 15, 2026, moves your submission deadline to October 15. But remember any taxes owed are still due in full by the original April 15 date.  Pay through either Direct Pay or your individual online account. See if you need to file a state extension.