54:8A-37 - Additional deductions
54:8A-37. Additional deductions
(a) In addition to the deductions authorized in section 35(b), any taxpayer shall be allowed the deductions itemized in this section to the same extent that such deductions are allowed to New Jersey residents who are subject to the income tax laws of a critical area state other than New Jersey. To the extent that any deduction itemized in this section has been taken by a taxpayer to compute his Federal adjusted gross income, such deductions shall not be allowed to a taxpayer computing his gross income in accordance with the provisions of section 36 of this act.
(b) Subject to the limitations expressed in subsection (a) hereof and any other limitations set forth in this act, the following deductions shall be allowed:
(1) Deduction of interest paid or accrued within the taxable year on indebtedness, except interest on indebtedness incurred or continued to purchase or carry obligations or securities the income from which is exempt from tax under this act.
(2) Deduction of taxes paid or accrued within the taxable year except--
(A) Income taxes imposed by this State or any other taxing jurisdiction,
(B) Federal import duties, excise and stamp taxes,
(C) Estate, inheritance, legacy, succession and gift taxes,
(D) Taxes assessed against local benefits of a kind tending to increase the value of the property assessed, and
(E) License fees payable for operation or ownership of motor vehicles; State and local license fees; taxes on cigarettes, other tobacco products and alcoholic beverages.
(3) Deduction of losses sustained during the taxable year, not compensated by insurance or otherwise, except--
(A) Losses, not incurred in a trade or business or in any transaction entered into for profit, shall be allowed only if they arise from fire, storm, shipwreck or other casualty or from theft, and only to the extent that the amount of loss to an individual arising from each casualty, or from each theft, exceeds $100.00;
(B) Losses from gambling activities shall be allowed only to the extent of the gains from such activities;
(4) Deduction of any charitable contribution payment of which is made within the taxable year to the extent that the aggregate of such contributions does not exceed 20% of the taxpayer's gross income.
In addition, there shall be allowed a deduction of any charitable contribution not in excess of 10% of the taxpayer's gross income which is made by the taxpayer within the taxable year to a religious organization, an educational organization which normally maintains a regular faculty and has a regularly enrolled body of students in attendance, an organization, the principal purposes or functions of which are the providing of medical or hospital care or medical education or medical or agricultural research, a governmental unit or an organization referred to in subparagraph (B) below which normally receives a substantial part of its support from a governmental unit described in subparagraph (A) below or from direct or indirect contributions from the general public.
In the case of an individual, if the amount of charitable contributions described above, payment of which is made within a taxable year beginning after December 31, 1963, exceeds 30% of the taxpayer's adjusted gross income for such year (computed without regard to any net operating loss carryback to such year), such excess shall be treated as a charitable contribution paid in each of the 5 succeeding taxable years in order of time.
For the purposes of this section, the term "charitable contribution" means a contribution or gift to or for the use of
(A) A state, territory, a possession of the United States, or any political subdivision of any of the foregoing, or the United States or the District of Columbia, but only if the contribution or gift is made for exclusively public purposes.
(B) A corporation, trust, community chest, fund or foundation--
(i) Created or organized in the United States or in any possession thereof, or under the law of the United States, any state or territory, the District of Columbia, or any possession of the United States;
(ii) Organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals;
(iii) No part of the net earnings of which inures to the benefit of any private shareholder or individual; and
(iv) No substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation.
(C) A post or organization of war veterans, or an auxiliary unit or society of, or trust or foundation for, any such post or organization--
(i) Organized in the United States or any of its possessions, and
(ii) No part of the net earnings of which inures to the benefit of any private shareholder or individual.
(D) A domestic fraternal society, order, or association, operating under the lodge system, but only if such contribution or gift is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.
(E) A cemetery company owned and operated exclusively for the benefit of its members or any corporation chartered solely for burial purposes as a cemetery corporation and not permitted by its charter to engage in any business not necessarily incident to that purpose, if such company or corporation is not operated for profit and no part of the net earnings of such company or corporation inures to the benefit of any private shareholder or individual.
(5)(A) Deduction of expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse or a dependent as follows:
(i) If neither the taxpayer nor his spouse has attained the age of 65 before the close of the taxable year--
(a) The amount of such expenses for the care of any dependent who--
(1) Is the mother or father of the taxpayer or of his spouse, and
(2) Has attained the age of 65 before the close of the taxable year, and
(b) The amount by which such expenses for the care of the taxpayer, his spouse, and such dependents (other than any dependent described in paragraph (a) of this subsection) exceed 3% of gross income.
(ii) If either the taxpayer or his spouse has attained the age of 65 before the close of the taxable year--
(a) The amount of such expenses for the care of the taxpayer and his spouse,
(b) The amount of such expenses for the care of any dependent described in paragraph (i)(a), and
(c) The amount by which such expenses for the care of such dependents (other than any dependent described in paragraph (i)(a)) exceeds 3% of the gross income.
(B) Amounts paid during the taxable year for medicine and drugs which (but for this paragraph) would be taken into account in computing the deduction under subsection (A) shall be taken into account only to the extent that the aggregate of such amounts exceeds 1% of gross income, except that the gross income limitation herein shall not apply to amounts paid for the care of the taxpayer and his spouse, if either of them has attained the age of 65 before the close of the taxable year, or for the care of the mother or father of the taxpayer or of his spouse, and has attained the age of 65 before the close of the taxable year.
(C) Except as provided in subsection (E), the deduction under this section shall not exceed $5,000.00, multiplied by the number of $600.00 exemptions allowed for the taxable year as a deduction under section 10 of this act (other than exemptions relating to additional exemptions for age or blindness); except that the maximum deduction under this section shall be--
(i) $10,000.00, if the taxpayer is single and not the head of a household and not a surviving spouse or is married but files a separate return; or
(ii) $20,000.00, if the taxpayer files a joint return with his spouse or is the head of a household or a surviving spouse.
(D) For purposes of subsection (A), expenses for the medical care of the taxpayer which are paid out of his estate during the 1-year period beginning with the day after the date of his death shall be treated as paid by the taxpayer at the time incurred.
(E)(i) Subject to the provisions of paragraph (ii) hereunder the deduction under this subsection shall not exceed--
(a) $20,000.00, if the taxpayer has attained the age of 65 before the close of the taxable year and is disabled, or if his spouse has attained the age of 65 before the close of the taxable year and is disabled and if his spouse does not make a separate return for the taxable year, or
(b) $40,000.00, if both the taxpayer and his spouse have attained the age of 65 before the close of the taxable year and are disabled and if the taxpayer files a joint return with his spouse.
(ii) For purposes of paragraph (i) hereunder
(a) Amounts paid by the taxpayer during the taxable year for medical care, other than amounts paid for--
(1) His medical care, if he has attained the age of 65 before the close of the taxable year and is disabled, or
(2) The medical care of his spouse, if his spouse has attained the age of 65 before the close of the taxable year and is disabled, shall be taken into account only to the extent that such amounts do not exceed the maximum limitation provided in subsection (C) herein which would (but for the provisions of this subsection) apply to the taxpayer for the taxable year;
(b) If the taxpayer has attained the age of 65 before the close of the taxable year and is disabled, amounts paid by him during the taxable year for his medical care shall be taken into account only to the extent that such amounts do not exceed $20,000.00; and
(c) If the spouse of the taxpayer has attained the age of 65 before the close of the taxable year and is disabled, amounts paid by the taxpayer during the taxable year for the medical care of his spouse shall be taken into account only to the extent that such amounts do not exceed $20,000.00.
(iii) For purposes of paragraph (i) hereunder, an individual shall be considered to be disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. An individual shall not be considered to be disabled unless he furnishes proof of the existence thereof in such form and manner as the Division of Taxation may require.
(iv) For purposes of paragraph (i) hereunder, the determination as to whether the taxpayer or his spouse is disabled shall be made as of the close of the taxable year of the taxpayer, except that if his spouse dies during such taxable year such determination shall be made with respect to his spouse as of the time of such death.
(6) Deduction shall be allowed for expenses paid during the taxable year by a taxpayer who is a woman or a widower or is a husband whose wife is incapacitated or is institutionalized, for the care of the taxpayer's child or stepchild under the age of 13 years or is physically or mentally incapable of caring for himself, but only if such care is for the purpose of enabling the taxpayer to be gainfully employed but such deduction shall not exceed $600.00 for any taxable year. The $600.00 limit herein shall be increased (to an amount not above $900.00) by the amount of expenses incurred by the taxpayer for any period during which the taxpayer had two or more dependents.
In the case of a married woman, and in the case of a husband whose wife is incapacitated, this deduction shall be allowed only if a joint return is filed, and shall be reduced by the amount (if any) by which the adjusted gross income of the taxpayer and his spouse exceeds $6,000.00.
(7) Deduction for amounts paid by a husband to his wife for alimony, support or separate maintenance pursuant to a court decree or for support or maintenance pursuant to a written separation agreement.
(8) Deductions shall be allowed for moving expenses paid or incurred during the taxable year in connection with the commencement of work by the taxpayer as an employee at a new principal place of work.
(A) No deduction shall be allowed unless
(i) The taxpayer's new principal place of work
(a) Is at least 20 miles farther from his former residence than was his former principal place of work or
(b) If he had no former principal place of work, is at least 20 miles from his former residence, and
(ii) During the 12-month period immediately following his arrival at the general location of his new principal place of work, the taxpayer is a full-time employee, in such general location, during at least 39 weeks.
(B) Moving expenses means only the reasonable expenses
(i) Of moving household goods and personal effects from the former residence to the new residence and
(ii) Of traveling (including meals and lodging) from the former residence to the new place of residence.
In the case of any individual other than the taxpayer, expenses referred to herein shall be taken into account only if such individual has both the former residence and the new residence as his principal place of abode and is a member of the taxpayer's household.
(C) No deductions shall be allowed under this section for any item to the extent that the taxpayer received reimbursement or other expense allowance for such item which is not included in his gross income.
(9) In addition to any deduction taken under section 35(a) of this act or in the computation of Federal adjusted gross income in the case of a taxpayer who has computed his gross income in accordance with the provisions of section 36 of this act, there shall be allowed a deduction for all the ordinary and necessary expenses paid or incurred by a taxpayer, including traveling expenses while away from home, as an employer or an employee during the taxable year in carrying on or working at any trade or business.
(10) Deduction for net premiums paid or incurred by a taxpayer during the taxable year with respect to any life insurance or endowment policy upon his life, but such deduction shall not exceed $150.00 in the aggregate; provided, however, for taxable years beginning on or after January 1, 1971 such amount shall not exceed $100.00 in the aggregate; and for taxable years beginning on or after January 1, 1972, such amount shall not exceed $50.00 in the aggregate; and for taxable years beginning on or after January 1, 1973, no such deduction shall be allowed.
(c) Any taxpayer who elects to take the itemized deductions allowed in this section shall be permitted to take the full amount of the deduction permitted in section 35(b) and in this section except that if (a) his gross income, as defined in section 7, is exceeded by (b) his entire gross income by more than $100.00, his itemized deductions allowed in section 35(b) and this section shall be limited by the percentage which (a) is of (b). The manner for determining a taxpayer's entire gross income shall be provided by regulation. Such regulations may authorize the use of Federal adjusted gross income for this purpose.
L.1961, c. 32, p. 144, s. 37, eff. May 29, 1961. Amended by L.1961, c. 129, p. 779, s. 23; L.1964, c. 279, s. 3; L.1970, c. 304, s. 7.