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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

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!

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7 Replies
DianeW777
Expert Alumni

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

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.

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raltmann2020
Returning Member

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

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
Expert Alumni

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

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?

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raltmann2020
Returning Member

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

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

BillM223
Expert Alumni

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

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.

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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

Hi, replying for clarification on.  Work in NY and live in NJ (box 1 and 16 is same)

 

After adding all the Cafe 125 items (health care premium/dental/vision/fsa/commuter) as income in NJ reporting,  do I then add all of the cafe 125 items (health care premium/dental/vision/fsa/commuter)  as a Medical expense or just the health care insurance premium?  

 

This was posted as reference on another thread
https://www.state.nj.us/treasury/taxation/njit13.shtml#:~:text=Insurance%20premiums%2C%20including%2....

 

BillM223
Expert Alumni

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

No, you can add only those items that would normally be deductible as Medical and Dental expenses on the federal return. For example. health care premiums that are NOT excluded from your Wages (so code DD does not count) can be deducted in NJ.

 

See Pub 502 for the lowdown on deductible Medical Expenses.

 

The NJ Instructions state:

You can deduct certain unreimbursed medical expenses you paid during the year for yourself, your spouse or domestic partner, and any dependents you claim. You can only deduct expenses that are more than 2% of your gross income. In general, medical expenses allowed for federal tax purposes are allowed for New Jersey tax purposes. These can include: 

• Physicians, dental, and other medical fees; 

• Prescription eyeglasses and contact lenses; 

• Hospital care; 

• Nursing care; 

• Medicines and drugs; 

• Prosthetic devices; 

• X-rays and other diagnostic services conducted by or directed by a physician or dentist; 

• Amounts paid for transportation primarily for and essential to medical care; 

• Insurance (including amounts paid as premiums under Part B of Title XVIII of the Social Security Act, relating to supplementary medical insurance for the aged) covering medical care. You can also deduct qualified Archer MSA contributions and self-employed health insurance costs. Information is available on our website at nj.gov/treasury/taxation/njit13.shtml

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