Generating a New Jersey part-year return in Lacerte

In contrast to other states, New Jersey doesn't offer a specific form for individuals who only reside in the state for part of the year. The resident return, Form NJ-1040, is used to report income earned while living in New Jersey. If income was received from New Jersey sources before or after the individual's period of residence in the state, they may also need to file Form NJ-1040NR. This means that a part-year resident of New Jersey may need to file both a resident and nonresident tax return.

See the New Jersey Division of Taxation for more information: http://www.state.nj.us/treasury/taxation/njit26.shtml

Generating NJ-1040NR

If the part-year resident also needs to file a NJ-1040NR, two client files will be needed.

For the part-year resident (NJ-1040), ensure the Full Year Resident box on screen 1, client information, is not checked. When entering income and other items, ensure only the amounts earned while a New Jersey resident are allocated to New Jersey.

For the part-year nonresident (NJ-1040NR), many preparers will make a copy of the part-year resident client to use as a starting point. Update the income and other items to allocate only the amounts earned from New Jersery sources while a nonresident. Then go to screen 55.081 and check the Print nonresident return.

It's recommended to review both returns again to help ensure that items such as withholding are split between the two returns properly.

Filing the NJ-1040 and NJ-1040NR

You can only e-file one non-amended return for each tax year. Because of this, you won’t be able to e-file both NJ-1040 and NJ-1040NR.

While it's possible to e-file one return and paper file the other, some tax preparers prefer to paper file both returns to ensure they're processed at the same time.