How to File Your New Jersey Tax Return for 2016: A Step-by-Step Guide

Filing your 2016 New Jersey state income tax return can feel overwhelming if you’re unfamiliar with the required forms and Division of Taxation procedures. In this guide, you’ll learn how to file your tax return for 2016 using the correct NJ-1040 form, understand key instructions from the New Jersey Treasury Division, and follow step-by-step directions that simplify the process.

Whether you file electronically via NJ WebFile or commercial software or prefer mailing a paper return, you’ll see which New Jersey tax forms and schedules apply to individuals, sole proprietors, and small business owners. We’ll explain how to report your income using your Social Security number, claim credits like the Earned Income Tax Credit, and calculate any payments or refunds due.

By breaking down each phase—from gathering documents to submitting your return—you’ll streamline online processing, avoid common errors, and meet all deadlines. With clear guidance on Division of Taxation requirements and payment options, you can complete your 2016 return confidently and focus on what matters most: your financial peace of mind.

Overview of New Jersey State Income Tax for 2016 

Who Needs to File

• Income thresholds: Individuals and married couples who earn above the income thresholds must file a return. For single filers or married individuals filing separately, the threshold is $10,000 in gross income, while married couples filing jointly, heads of household, or qualifying widows must file if their gross income exceeds $20,000.
  
  
• Withholding and estimated payments: Taxpayers with New Jersey income tax withheld or who made estimated tax payments may need to file even if their income falls below the thresholds. Filing ensures you claim any refund due from amounts withheld on your W-2 or paid through enterprise services.
  
  
• Claiming notable credits: Individuals eligible for the Property Tax Credit or the Alternative Business Calculation Adjustment must file to claim their benefits. Including forms like NJ-1040H or Schedule NJ-BUS-2 can reduce your tax liability and maximize your refund.
  
  
• Full-year and part-year residents: Full-year and part-year residents use Form NJ-1040 but report income differently based on residency period. Prorating income and deductions ensures compliance with New Jersey statutes and prevents penalties for inaccurate filing.
  
  

Key Changes for the 2016 Tax Year

• Earned Income Tax Credit increase: The New Jersey EITC rate rose to 35% of the federal credit, up from previous years. This enhancement provides tax relief for low- to moderate-income earners and can significantly boost your refund.
  
  
• Extended filing deadline: The due date was pushed to April 18, 2017, because of the Emancipation Day holiday in Washington, D.C. Taxpayers gained extra time to gather documents and complete returns, but must still file or e-file by this date to avoid late-filing penalties.
  
  
• Optional ID verification: Taxpayers may now include a driver’s license or state non-driver ID number to help verify identity and combat fraud. While voluntary, providing this information can speed up processing without adding mandatory requirements.
  
  
• Enhanced business loss deduction: The Alternative Business Calculation Adjustment on Schedule NJ-BUS-2 has been increased to a 50% deduction for qualifying losses. Small business owners and self-employed taxpayers can benefit from reducing taxable income from areas such as rental or partnership losses.
  
  
• New tax-favored options: Distributions from ABLE accounts became tax-exempt, and contributions to the Support of New Jersey Nonprofit Veterans Organizations fund were added as a charitable option. These changes can support savings goals and charitable giving while minimizing state taxes.
  
  

New Jersey Tax Forms and Attachments

Choosing the correct tax forms and schedules is essential for accurate reporting and timely processing by the Division of Taxation. The proper forms ensure you comply with NJ requirements, claim all eligible credits, and avoid delays in your 2016 tax returns.

Main Individual Income Tax Forms

• Form NJ-1040: This is the primary form for New Jersey and part-year residents to report state wages, income from interest, dividends, and other sources. It guides you through exemptions, deductions, and tax calculations according to the New Jersey Division of Taxation instructions.
  
  
• Form NJ-1040NR: Non-residents who earned income from New Jersey sources use this form to report their state-taxable income. Filing NJ-1040NR ensures you pay the correct amount of New Jersey tax on wages and other income earned within the state.
  
  
• Form NJ-1040-H: Qualified seniors and disabled persons use this property tax credit application to claim up to $50 in credits or deductions against property taxes. Including NJ-1040-H with your NJ-1040 can reduce the tax you owe or increase your refund on your 2016 return.
  
  
• Form NJ-1040-V: When making payments by check or money order, this payment voucher must accompany your submission. It ensures that the New Jersey Treasury Division applies your payment correctly to your account and tax year.
  
  
• Form NJ-630: Use this application for a six-month extension to file your return if you need more time. Remember that an extension to file is not an extension to pay; you must pay at least 80% of your estimated tax liability by the original due date to avoid penalties and interest.
  
  

Common Schedules and Attachments

• Schedule A: Attach this schedule to claim credit for taxes paid to other jurisdictions on income earned outside New Jersey. It prevents double taxation and adjusts your New Jersey tax liability based on tax already paid to other states.
  
  
• Schedule B: Use this schedule to report capital gains and losses from the disposition of property, including sales of stocks and real estate. Accurate reporting on Schedule B affects your taxable income and ensures compliance with NJ revenue rules.
  
  
• Schedule NJ-BUS-1: This business income summary schedule is required for reporting net profits from self-employment, partnerships, S corporations, and rental activities. Filing Schedule NJ-BUS-1 helps the Division of Taxation calculate your business income for the 2016 tax year.
  
  
• Schedule NJ-BUS-2: Complete this schedule to apply the Alternative Business Calculation Adjustment for qualifying losses. The 50% adjustment for 2016 reduces taxable business income, helping small business owners and sole proprietors lower their overall NJ tax obligation.
  
  
• Form NJ-2450: This claim form requests a refund of excess unemployment, disability, or family leave insurance contributions. Filing NJ-2450 ensures you recover any overpaid amounts for 2016, such as maximum contributions of $138.56 for unemployment and $65.20 for disability.
  
  

Step-by-Step Filing Instructions

Follow these structured steps to prepare and file your 2016 New Jersey tax return accurately. Each step ensures you use the correct New Jersey tax forms, meet Division of Taxation requirements, and avoid common errors that could delay processing or reduce your refund.

Step 1: Gather Required Documents

Before you start completing your return, collect all supporting documentation. You will need W-2 forms showing New Jersey state wages (Box 16), 1099 forms for interest, dividends, and retirement distributions, and Schedule K-1s for partnership or S-corporation income. Furthermore, gather receipts for property taxes or rent paid if you plan to claim the Property Tax Credit, records of estimated tax payments made online or via mail, and a copy of your federal tax return to reference your adjusted gross income.

Step 2: Complete Form NJ-1040

Using Form NJ-1040, enter your personal information, including your Social Security number and county code, then report all income sources—wages, interest, dividends, business income, and capital gains. Claim exemptions for yourself, spouse, and dependents, and calculate any retirement income exclusions if you qualify. Next, apply deductions such as medical expenses exceeding 2% of income or the Alternative Business Calculation Adjustment on Schedule NJ-BUS-2. Finally, use the New Jersey Tax Table or rate schedule to determine your tax liability, subtract credits you qualify for (like the increased Earned Income Tax Credit), and calculate your balance due or refund.

Step 3: Review Common Mistakes to Avoid

Double-check that you entered state wages (not federal wages), claimed all income sources, and attached required schedules and forms—such as NJ-1040-H for property tax credits or NJ-1040-V if you owe a payment. Verify that your filing status and exemptions are correct, all math is accurate, and you have signed the return. Failing to include your proper mailing address or missing the April 18, 2017, deadline can result in penalties and interest charges, so ensure every detail complies with New Jersey Division of Taxation instructions.

Filing Methods

Choose the filing method that best suits your needs—whether you prefer the speed and convenience of filing electronically or the traditional paper route—so you can comply with New Jersey Division of Taxation requirements and track your return efficiently.

Electronic Filing Options

• NJ WebFile: This free online system offered by the New Jersey Division of Taxation lets full-year residents file Form NJ-1040 and relevant schedules electronically without purchasing software. Filing through NJ WebFile provides immediate confirmation of receipt, faster refund processing, and secure data transmission over the state’s revenue portal.
  
  
• NJ E-File with Commercial Software: Many commercial tax preparation programs support New Jersey returns and guide you through data entry, form completion, and calculations. These services often integrate with federal IRS filings to streamline the process but may charge a fee for state filings.
  
  
• NJ Fill’nFile PDF: The state’s free PDF-based filing option allows taxpayers to download Form NJ-1040 and schedules, complete them on-screen, and submit electronically. While this method requires manual form completion, it ensures you use the correct forms and follow Division of Taxation instructions without purchasing software.
  
  

Paper Filing Guidelines

• Use proper ink and formatting: Complete your NJ-1040 return and all attachments using blue or black ink. Write numbers within the designated boxes, avoid dollar signs or dashes, and enter zeros after the decimal point for cents when rounding.
  
  
• Attach required schedules and documentation: Staple together Form NJ-1040, schedules (such as NJ-1040H for property tax credits and NJ-BUS-1 for business income), and W-2/1099 attachments in the order specified by the Division of Taxation. Failing to include these can delay processing and your refund.
  
  
• Mail to the correct address: If you are enclosing a payment, send your return with Form NJ-1040-V to the State of New Jersey—TGI, Revenue Processing Center, PO Box 111, Trenton, NJ 08645-0111. For non-payment returns, mail to PO Box 555, Trenton, NJ 08647-0555. Ensure your envelope is postmarked by April 18, 2017, to avoid late-filing penalties.

Payment Options and Deadlines

Payment Methods

• Check or Money Order: Use Form NJ-1040-V to mail a check or money order payable to “State of New Jersey–TGI.” Include your Social Security number and “2016 NJ-1040” on the memo line so the Division of Taxation applies your payment correctly.
  
  
• Electronic Check (E-check): Pay online through the New Jersey Division of Taxation revenue portal using your bank routing and account numbers. This no-fee option posts immediately, streamlines online processing, and provides instant confirmation to help you track your transaction.
  
  
• Credit or Debit Card: Submit payment via the state’s payment service or by phone using Visa, MasterCard, Discover, or American Express. While convenient and quick, card payments incur a processing fee charged by the service provider and are posted immediately to your tax account.

Payment Deadline

All payments, whether by mail, electronic check, or credit card, must be received or postmarked by April 18, 2017, to avoid late-payment penalties and interest. Choosing electronic payment methods ensures immediate posting to the New Jersey Division of Taxation’s system, reduces the risk of postal delays, and confirms your compliance with state revenue requirements.

How to Track Your Refund or Balance Due

Refund Status

You can check the status of your New Jersey income tax refund online through the Division of Taxation’s refund status portal by entering your Social Security number and the refund amount you requested on Form NJ-1040. This online service provides real-time updates, letting you see whether your return has been received, approved, or if additional review is required. If you prefer to track your refund by phone, call the Division of Taxation at 1-800-323-4400 or 609-826-4400 and provide the same identifying information for efficient service.

Processing Time

Typically, electronically filed returns yield refunds within four weeks of acceptance by the Treasury Division, while paper returns can take up to 12 weeks for processing and posting. Delays may occur if your return requires additional review—such as verifying credits or documentation—so using NJ WebFile and opting for direct deposit can shorten wait times. Regularly checking your refund status online helps you anticipate when the funds will be deposited or applied toward any balance due.

Final Filing Checklist

• Personal information correct: Ensure your name, address, Social Security number, and county code on Form NJ-1040 are accurate to prevent processing delays and misapplied refunds.
  
  
• Filing status and exemptions confirmed: Select the correct filing status and claim dependents or age/blindness exemptions so you pay the appropriate amount of tax.
  
  
• Required schedules attached: Include forms such as NJ-1040H for property tax credits, NJ-BUS-1 for business income, and all W-2/1099 attachments to support your claims without additional Division of Taxation requests.
  
  
• Math double-checked: Verify calculations against the New Jersey Tax Table and confirm credits, like the increased Earned Income Tax Credit, to avoid discrepancies in balances due or refund amounts.
  
  
• Return signed and dated: Please sign and date your return—joint filers must include both signatures—to ensure your submission is complete and avoid processing delays.
  
  
• Filing method reviewed: Confirm your choice of e-file via NJ WebFile or mailing a paper return, and verify the correct mailing address or receive online confirmation for timely acceptance.
  
  
• Payment method arranged: Complete Form NJ-1040-V for check or money order payments, or schedule an e-check or credit/debit card payment by April 18, 2017, to avoid late-payment penalties and interest.
  
  
• Copies retained: Keep a copy of your completed return and all supporting documents for at least four years to address any Division of Taxation inquiries or amendments.

FAQs

What if I missed the deadline for April 18, 2017?

If you missed the April 18, 2017, deadline and owe tax, you will incur late-filing penalties and interest on the balance due. File your NJ-1040 return as soon as possible to minimize charges. If you are due a refund, there is no penalty, but you must file within three years of the original due date to claim it.

Can I e-file for free?

Yes, New Jersey offers the free NJ WebFile system and the NJ Fill’nFile PDF option for electronically filing your 2016 tax returns without purchasing software. These Division of Taxation services let you complete and submit Form NJ-1040, schedules, and attachments online. You receive immediate confirmation of filing and faster refund processing, all at no cost.

What deductions are most commonly missed?

Taxpayers often overlook medical expenses that exceed 2 percent of income, the Property Tax Credit (including rent as property tax), and the Alternative Business Calculation Adjustment on Schedule NJ-BUS-2. Contributions to the veterans’ charitable fund and ABLE account earnings exclusion are also frequently missed. Reviewing these opportunities on your New Jersey tax forms can help maximize your refund.

How do I request an extension?

To request a six-month extension, file Form NJ-630 by April 18, 2017. This extension allows you more time to file Form NJ-1040 and schedules but does not extend the payment deadline. You must pay at least 80 percent of your estimated tax liability by the original due date to avoid late-payment penalties and interest on the remaining balance.

Can I file jointly if I moved mid-year?

If you and your spouse were full-year New Jersey residents, you may file jointly. If one spouse was a part-year resident or nonresident, you can still file a joint return reporting all income as residents or choose separate filing. Prorate income, exemptions, and deductions based on residency period so your New Jersey tax return complies with Division of Taxation rules.

Are Social Security benefits taxable in New Jersey?

No, Social Security benefits are not taxable on your New Jersey state income tax return, even if they are taxable federally. You should exclude these benefits from your gross income on Form NJ-1040 when calculating your state tax liability, helping you reduce your New Jersey tax payments or increase any refund due.

Where do I pay taxes if I live in New Jersey but work in Pennsylvania?

Under the Reciprocal Personal Income Tax Agreement, New Jersey residents working in Pennsylvania file a PA return only to claim a refund of any withheld PA tax. All wages are subject to New Jersey tax, so report them on Form NJ-1040. Claim credit for taxes paid to Pennsylvania on Schedule A to prevent double taxation.