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Federal Economic Stimulus


Individual Stimulus Payments
For New Jersey gross income tax purposes, the treatment of a Federal stimulus payment, including the one-time payment of $250 available to retirees and disabled individuals receiving certain Social Security, Supplemental Security Income, Railroad Retirement benefits, and veterans' benefits, corresponds to the Federal income tax treatment. The payment is not considered taxable income and should not be reported on the taxpayer’s gross income tax return.

Taxpayers who are filing a 2007 or 2008 Federal income tax return only to receive the economic stimulus payment and who do not normally need to file a New Jersey income tax return are not required to file a New Jersey gross income tax return unless their income for the year is above the filing threshold. For more information see Who Must File.

Business Incentives
In addition to providing stimulus payments to individuals, the Economic Stimulus Act of 2008 provides incentives to businesses. These incentives include a special 50 percent depreciation allowance for 2008 purchases and an increase in the small business expensing limitation (179 deduction) for tax years beginning in 2008.

For New Jersey gross income tax purposes, N.J.S.A. 54A: 5-1.2 decouples the Gross Income Tax Act from some Federal changes to depreciation and to IRC section 179 for assets placed in service on or after January 1, 2004. Therefore, as New Jersey decoupled from the Federal treatment, the Economic Stimulus Act will not change the current treatment of depreciation for New Jersey gross income tax purposes. The income tax depreciation adjustments for property placed in service on or after January 1, 2004, should be made on the Gross Income Tax Depreciation Adjustment Worksheet GIT-DEP.

For New Jersey corporation business tax purposes, N.J.S.A. 54:10A-4(k)(12)(A) decouples the corporation business tax from Federal changes to depreciation for property acquired after September 10, 2001. N.J.S.A. 54:10A-4(k)(13)(A) decouples the corporation business tax from Federal changes to IRC section 179 for property placed in service on or after January 1, 2004. Therefore, the Economic Stimulus Act will also not change the current treatment of depreciation or Section 179 for New Jersey corporation business tax purposes. The depreciation and Section 179 adjustments should be made on Schedule S of Form CBT-100.

For more information go to the IRS Economic Stimulus Payments Information Center.
Last Updated: Monday, 12/12/11



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