Federal K-1 shows Guaranteed Payment which represents the payout of a pension. NJ K-1 shows the amount on column A, line 5, for pension. I think this correct in accordance with the NJ partnership and individual instructions.
The amount was entered on the Federal input screen as a guaranteed payment and on the NJK-1 input screen as pension. But this amount did not appear as income on the NJ resident return as either a pension or a distributive share of partnership income. I think I entered the amount directly on the NJ-BUS-1, Part II, (through a worksheet) in order to pick up the income on the return. This worked. But shouldn't this be reported as "pension" on the NJ return, rather than "partnership income" (this is how I read the NJ instructions)? The tax result is the same, but wouldn't this create a matching issue for NJ?
Your thoughts are appreciated.
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I will page @Rick19744 re the GP issue.
I don't have a solid understanding of every state tax implications, but here are my thoughts based on what you are saying:
Thanks, Rick.
I think the NJ government instructions are clear, even though they may not make total sense. It may be because NJ allows a pension exclusion when income is under a certain level. That exclusion isn't applicable in the situation at hand.
Regarding your 2nd bullet point, I just want to clarify. The NJ input has an area to enter information from the NJ K-1 (even though the information from the federal K-1 has been entered in the federal input - as guaranteed payment). I entered the amount as pension, as per the NJ K-1, but it did not flow to the NJ return. That is why I went directly to the NJ-BUS-1 and entered the amount as partnership income. (Alternatively, I could input the amount as guaranteed payment on the NJ K-1 input screen.)
I thought there should be a way to make this work properly. So, I'm still open to suggestions.
However, if no solution is found, I'm inclined to go with your suggestion - leave the NJ return as I have it and pick up the amount as partnership income. I don't want to see a matching notice, but I can deal with it.
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