Not Eligible for Electronic filing in New Jersey because of "Pass-Through Business Alternative Income Tax Credit". What does this mean?

[FalconX]

I am trying to file my state tax returns and I am not eligible for electronic filing because of this Returns with Pass-Through Business Alternative Income Tax Credit.  Nothing really changed from last year for where I worked and all my savings accounts are the same.  I did withdraw money from a brokerage account though.  Does this have anything to do with a 1099?  I work in Philadelphia and live in New Jersey.

[ny_1]

I have the same issue.

[neilmcg]

I have the same issue with this message yet I do not have any pass through business alternative income tax credit.  I do not understand why I am having this issue.

[FalconX]

This sounds like a glitch on Turbo Tax end.  I do have a brokerage account through an LLC but they only send me 1099 forms.  I dont think this applies to Pass-Through Business tax credit.  

I do have a tax credit for taxes paid to other states, that being Philly but again that doesn't sound like this issue here.  

[Cynthiad66]

@FalconX - This could very well be a system hang-up but it could also be something in your return is triggering this form.  In any event the main issue is that this form has not been finalized and is needed for processing your return.  Below is some information about this new NJ document.  There may be other issues on the return that require passing through this document. I suggest you wait until the return is able to e-file. See next paragraph for more information.

For New Jersey purposes, income and losses of a pass-through entity are passed through to its owners. However, the law allows pass-through entities to elect to pay tax due on the owner’s share of distributive proceeds. The owner(s) may then claim a refundable tax credit for the amount of tax paid by the pass-through entity on their share of distributive proceeds.

Pass-through entities included under this law are:

• Partnerships;
• federal S corporations that have made the New Jersey S corporation election; and
• Limited liability companies (LLCs).

The entity must have at least one member who is liable for tax on their share of distributive proceeds pursuant to the New Jersey Gross Income Tax Act, N.J.S.A. 54A:1-1 et seq., in a taxable year.

Single member limited liability companies and sole proprietorships may not elect to pay the Pass-Through Business Alternative Income Tax.

“Distributive proceeds” means the net income, dividends, royalties, interest, rents, guaranteed payments, and gains of a pass-through entity, derived from or connected with sources within New Jersey.

If you still feel that this does not apply to you, we can try to delete the form:

Here's the general procedure for viewing the forms list and deleting unwanted forms, schedules, and worksheets in TurboTax Online:

1. Open or continue your return in TurboTax.
2. In the left menu, select Tax Tools and then Tools.
3. In the pop-up window Tool Center, choose Delete a form.
4. Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

[FalconX]

@Cynthiad66 Thank you for the advice.  However in another thread on here people are saying they have the same issue.  I will wait a little longer to file which is no big deal.  

https://ttlc.intuit.com/community/state-taxes/discussion/nj-e-fi[product key removed]ge/00/2488650

[Geo - Sny]

I have the same issue as well. Nothing has changed from 2020 (where I was able to file New Jersey electronically) regarding my 2021 return but I am receiving the "Not eligible for electronic filing in New Jersey because of Pass-Through Business Alternative Income Tax Credit" message.  I do not want to file via paper/US mail.

[hanksmp]

Was this ever resolved?

I have the same problem with my 2022 return.

[Geo - Sny]

Hello,

Unfortunately no. I had to file NJ (again) via paper this year.

I also ran into a problem when I attempted to electronically file my 2022 Federal return. It was initially accepted and then moved to a rejected status on Turbo Tax with a reason (name and EIN to do match). This is somewhat frustrating since I have been successfully filing my Federal return electronically for several years without issue so I am unclear on what the issue is (Turbo Tax suggested that I contact the IRS).

At that point I simply mailed the paper Federal and NJ returns via the Post Office.

Sorry I can't be more help!

[MarilynG1]

Per @Cynthiad66 above:

"For New Jersey purposes, income and losses of a pass-through entity are passed through to its owners (reported on a K-1). The owner(s) may then claim a refundable tax credit for the amount of tax paid by the pass-through entity on their share of distributive proceeds.

Pass-through entities included under this law are:

• Partnerships;
• federal S corporations that have made the New Jersey S corporation election; and
• Limited liability companies (LLCs).

Single member limited liability companies and sole proprietorships (Schedule C) may not elect to pay the Pass-Through Business Alternative Income Tax."

If you feel this does not apply to you, delete New Jersey Form PTE-100 from your return.

@hanksmp 

[hanksmp]

That may very well be my fate too.  Thanks for the reply

[hanksmp]

Interesting.  We had the pass-thru and a PTE last year and the return was filed electronically by my accountant.

No new forms just different numbers this year.

I figured I would file my return with TurboTax this year to save some money.

The help person who I spoke to at TurboTax said it might be the relationship between TurboTax and NJ.  I was hoping it was just a glitch that will be worked out, so I don't have to mail in the state return.