ASSEMBLY, No. 305

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblyman BODINE

An Act allowing married individuals an option to file joint or separate tax returns, amending N.J.S.54A:8-3.1.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. N.J.S.54A:8-3.1 is amended to read as follows:

    54A:8-3.1. Persons required to file. a. On or before the filing date prescribed in section 1 of this chapter (N.J.S.54A:8-1), an income tax return shall be made and filed by or for an individual, whether filing as unmarried or determining tax pursuant to subsection a. of N.J.S.54A:2-1, an estate or trust, having a gross income in excess of $3,000.00, and by or for a married couple filing a joint return and having joint gross income in excess of $3,000.00 ($1,500.00 or more in the case of a married person filing separately).

    b. If the income tax liability of husband and wife is determined on a separate return for federal income tax purposes, they shall each also file a separate return for New Jersey income tax purposes and their income tax liabilities under this act shall be separate.

    c. If the income tax liabilities of husband and wife are determined on a joint return for federal income tax purposes, they shall [also] file either a joint return or separate returns for New Jersey income tax purposes and their tax liabilities [under] pursuant to this act under a joint return shall be joint and several or under separate returns shall be separate.

    d. If either husband or wife is a resident and the other is a nonresident, they shall file separate tax returns under this act on such single or separate forms as may be required by the director in which event their tax liabilities shall be separate unless both elect to determine their joint taxable income as if both were residents, in which event their liabilities shall be joint and several.

    e. The return for any deceased individual shall be made and filed by his fiduciary or other person charged with his property.

    f. The return for an individual who is unable to make a return by reason of minority or other disability shall be made and filed by his fiduciary or other person charged with the care of his person or property (other than a receiver in possession of only a part of his property), or by his duly authorized agent.

    g. Any tax under this act, and any increase, interest or penalty thereon, shall, from the time it is due and payable, be a personal debt of the person liable to pay the same, to the State of New Jersey.

(cf: P.L.1990, c.61, s.15)

    2. This act shall take effect immediately.

STATEMENT

    This bill gives a married couple filing a joint federal income tax return the option to file either a joint State income tax return or separate returns. Currently, if a married couple files a joint return for federal income tax purposes, the couple must file under the same status for State income tax purposes. However, in many cases a married couple filing a joint return must pay a "marriage penalty," meaning that the couple’s State income tax is higher under the joint return than it would have been if they were able to file separate returns.

    For example, a married couple filing jointly with taxable income of $70,000 would pay State income taxes of $1,850. That same couple, if they each had $35,000 of taxable income and if they could file separate returns, would pay $775 each, or $1,550 combined. The $300 difference is a tax “marriage penalty” for being married and filing a joint return.

Allows a married couple filing a joint federal income tax return to file either a joint State return or separate State returns.