Claim of right repayment on New Jersey state return

Forum|Forum|4 years ago
January 4, 2022
3 replies
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In 2021, I had to pay back an income in excess of $3,000 from 2020. I need claim the taxes paid/get a credit on 2021 tax return.

For federal tax return, I found instructions here for getting a take a refundable credit: https://ttlc.intuit.com/community/unemployment-taxes/help/what-is-a-claim-of-right-repayment/00/2153043

However I don't know how to claim a credit on New Jersey tax return. Appreciate any help.

Best answer by RaifH

Yes, that is correct. No matter which method you used on your federal return, New Jersey does not allow a similar credit or deduction on the state return.

fanfare

Employee

See here also:

https://answerconnect.cch.com/document/jnj0109013e2c86dc15f3/state/explanations/new-jersey/federal-base-claim-of-right-adjustment

lt21811Author

According to the above document, does it mean I can't claim for any deduction or credit under NJ state tax return?

RaifHAnswer

Yes, that is correct. No matter which method you used on your federal return, New Jersey does not allow a similar credit or deduction on the state return.

danfly09

I found this,

Claim of Right Repayment Refunds (IRC 1341) (state.nj.us)

It seems you can make a deduction in the year of the repayment.

AmyC

Employee

The state search function has several reference to the 2011 laws allowing the Claim of Right repayment. Unfortunately, nothing from 2021 indicates the existence. NJ Forms and Instructions make no mention while the IRS instructions tell you exactly where the credit goes. It only seems fair to get a credit for taxes paid.

You may need to file Form 843 for Medicare and Social Security taxes to be refunded, See page 36, third column. Pub 525.

@danfly09

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nkasoff

Per New Jersey TAM 2011-7, while NJ does not support the federal methods, they allow you to adjust wages during the year of repayment. This can be done in the wage adjustment screen of the New Jersey interview in TurboTax.

https://www.nj.gov/treasury/taxation/pdf/pubs/tams/tam7.pdf