Which Line of NJ 1040 Tax Return Form, foreign social security benefits (income) should be reported on?. Are they considered non taxable like Federal ones?. Thanks very much
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@Kosetife , please provide info as to which country is the pension from . I agree that generally Social Security ( i.e. public pension ) is generally taxable ONLY in that country -- but it is for those countries with which US has a Tax treaty and Totalization agreement.
As far as NJ taxability, I am not familiar with that . However see this page from NJ DOR:
GIT-1 - Pensions and Annuities (nj.gov)
Hope this helps
You are correct as far as Foreign SS Pensions from countries that have a bilateral agreement with the US .
In my case Argentina hasn’t any. So it’s taxable without any doubt at Federal & State levels.
Anyway NJ offers certain exclusions if certain conditions are met. Let me explain.
As a matter of fact, those living in New Jersey have two lines on our 1040 NJ Tax Return Form: Line 20a) for pension, annuities, IRA and the like and Line 27 for other incomes.
The instruction for Line 20a) indicating the incomes to be reported, doesn’t mention specifically nothing regarding foreign pensions. This doesn’t mean of course that foreign pension should not be reported on Line 20a) but arises the doubt leaving the option to report it on Line 27 reserved for “other income” that is for any other income for which a place to report it cannot be found in such Form. So, there is a sort of room for interpretation.
Anyway, just to clarify the matter it’s important not to forget that 1040 NJ Tax Return Instructions determine that retirements exclusions are related to the amount reported on Line 20a) if the taxpayer is 62 or older and his/ her income is below 150 k.
So, if a foreign pension is reported on Line 27 no exclusion is allowed .
Taking into account that NJ Taxation Regulatory Services Branch informed me in writing that :
“While the foreign source payments are considered taxable income, the income still may be excludable under the pension exclusion. Generally, a taxpayer can exclude all or part of the pension income reported when meeting the following conditions:
I assume that those new Jearseans that meet those two condition legally can (must) report their foreign pensions on Line 20a) in order to get the exclusion .
I do hope this clarification that I got after the written reply from NJ Taxation Regulatory Services Branch will help all new Jerseyan to correctly report income taxes in NJ
Any comments from anyone participating in this chat will be appreciated to enrich it.
@Kosetife , while generally agreeing with your post , a few things that still concern me and therefore I would strongly recommend a discussion / opinion of a NJ Tax professional. The reason for this is that while the instructions for form NJ-1040 does a reasonable job of explaining pension and taxation thereof,( pages 12 through 17 ) I am unable to see the actual statute:
(a) it appears to distinguish between contributory and non-contributory plans ;
(b) assumes that all contributory plans * except for 401/ 403s or similar tax advantaged" are already taxed at source / contribution after tax
(c) makes no distinction between "other state" and "foreign country" pension
(d) While it is quite clear about US govt. pension like Social Security Payments as exclusion ( from taxable income and from pension adjustment / exclusion, it is quite silent about "Social Security / Govt. pension analogs " from other countries being received by NJ residents.
Because of this lack of familiarity of myself , I suggest opinion/ advice from NJ tax professional
pk
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