G2R Posted April 5, 2022 Report Posted April 5, 2022 Client lives in NJ, works in NY. Employer does NOT provide a NJ wage detail on the W-2 so I have to calculate myself. It's my understanding that NJ only allows 401k to be deducted from wages But on the NJ-1040 I see a medical expense deduction for 125 Plans. Limited research suggests I can take the premiums my client paid for health, vision etc and deduct the amount over 2% of NJ AGI on the front page of the 1040. (Luckily they gave me the 12/31 paystub so I know they portion). Any NJ preparers that can confirm this? Previous preparer didn't do this so self-doubt makes me hesitate. Quote
Medlin Software, Dennis Posted April 5, 2022 Report Posted April 5, 2022 There is a way to exclude 125 in NJ. If the employer sets it up a certain way. Quote
G2R Posted April 5, 2022 Author Report Posted April 5, 2022 4 hours ago, Medlin Software said: There is a way to exclude 125 in NJ. If the employer sets it up a certain way. The employer doesn't acknowledge the employee's NJ residency at all. Quote
Medlin Software, Dennis Posted April 5, 2022 Report Posted April 5, 2022 Employer has no obligation to handle domicile, only nexus. Maybe the NY liability is more than NJ, and if a credit towards NJ is allowed, then there is no NJ liability. It could be if the 125 is salary reduction, it may need to be included in NJ taxable. Quote
G2R Posted April 5, 2022 Author Report Posted April 5, 2022 4 minutes ago, Medlin Software said: Employer has no obligation to handle domicile, only nexus. Maybe the NY liability is more than NJ, and if a credit towards NJ is allowed, then there is no NJ liability. It could be if the 125 is salary reduction, it may need to be included in NJ taxable. Yes, I have to add back the pre tax items the NJ doesn't allow to be excluded from taxable wages. Some of those items that need to be added back are EE paid health insurance premiums, vision, dental, etc. I'm looking to confirm that when I add those items back to wages for NJ purposes only, they are also now eligible items for medical deduction on line 31 of the NJ-1040. Quote
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