Live in NJ and work in NY. Reporting Cafe 125 contributions as wage in NJ return and Health Care premiums as medical deduction in Other Wage Adjustment - W-2

[tbxuser]

Live in NJ and work in NY  so (box 1 and 16 are same amount) 

For NJ return, in "For 'other wage adjustments - w-2", I need to;

- Report all Cafe 125 contributions (health care premium/dental/vision/fsa/commuter) as wage

Medical Expenses section;

- Report health care premium as Medical Deduction under "New Jersey medical insurance premiums included in your New Jersey wages but not in your..."

Is this correct? Thank you!

[DianeW777]

Yes, report all Cafeteria Section 125 contributions as income for New Jersey(NJ) taxable income.  Medical insurance premiums are pretax for federal but after tax for the state, so they can be added to the medical expense deduction on the New Jersey tax return.

• NJ Medical Expense Deduction

[raltmann2020]

What about unspent medical Flex Spending Account funds?  For example, if my employer withheld $1,000, but I only spent $700 in the same year; and I spend the remaining 300 the following January?  How much can be included in my NJ itemized medical expenses?

[BillM223]

Did your employer allow a carryover of your health FSA funds? That is, to which year did these $300 in FSA funds spent in January belong: 2023 or 2024?

[raltmann2020]

Yes.  I carried over the $300 from 2023 to 2024, and spent it in January 2024.

[BillM223]

Then the $300 belongs on your 2024 return. We individual taxpayers are generally on a cash basis, that is we report things in the year in which they happen.