How to Calculate Your Estimated Tax
Determine your expected income, then subtract your exemp- tions and deductions to arrive at your expected taxable income. Apply the appropriate tax rate to your expected taxable income. Subtract total anticipated credits and withholdings to arrive
at your estimated tax. Use the estimated tax worksheet on page 3 as a guide for this calculation. See the instructions for the NJ‑1040, NJ‑1040NR, or NJ‑1041 for more details on in- come, exemptions, deductions, and credits.
Retirement Income Exclusions. If you are 62 or older, you may be able to exclude pension and other retirement income. These exclusions only apply for taxpayers with income up to $150,000.
You may be able to claim the following exemptions:
•• Taxpayer (and either spouse/civil union partner, if filing jointly, or domestic partner) – $1,000 each;
•• Taxpayer (and spouse/civil union partner if filing jointly) who is 65 or older – an additional $1,000 each;
•• Taxpayer (and spouse/civil union partner if filing jointly) who is blind or disabled – an additional $1,000 each;
•• Taxpayer (and spouse/civil union partner if filing jointly) who is a veteran honorably discharged or released from active duty in the U.S. Armed Forces – an additional $6,000 each;
•• Each dependent who qualifies as your dependent for federal income tax purposes – $1,500 per dependent;
•• Each dependent under age 22 who is attending an accredited institution of higher education full time – an additional $1,000 per dependent.
You can deduct the following:
•• Medical expenses in excess of 2% (0.02) of gross income, qualified Archer medical savings account (MSA) contribu tions, and health insurance costs of the self-employed;
•• Alimony and separate maintenance payments, subject to certain limitations;
•• Qualified conservation contributions;
•• Health Enterprise Zone deduction;
•• Property Tax Deduction or Credit (claim only one);
•• Alternative business calculation adjustment;
•• Organ/Bone Marrow Donation Deduction.
If you meet the eligibility requirements, you can claim:
•• Property Tax Credit or Deduction (claim only one);
•• New Jersey Earned Income Tax Credit;
•• Child and Dependent Care Credit;
•• Wounded Warrior Caregivers Credit;
•• Gold Star Family Counseling Credit;
•• Sheltered Workshop Tax Credit;
•• Credit for Employer of Organ/Bone Marrow Donor;
•• Pass-Through Business Alternative Income Tax Credit.
See the instruction booklet for the Income Tax return that you file for information on how to estimate the amount of your credit(s).
Fiscal Year Taxpayers
Fiscal year filers must estimate their tax for the period covered by their fiscal year, and change the payment due dates to corre- spond with the 15th day of the fourth, sixth, and ninth month of their fiscal year, and the first month after the end of their fiscal year. When any date falls on a Saturday, Sunday, or legal holi day, substitute the next regular workday.
If at least two-thirds of your total estimated income for the tax year is from farming (including oyster farming), you can submit your estimated tax payments at any time on or before Janu- ary 17, 2023. In this case, the estimated tax must be paid in full. If you operate on a fiscal year basis, file by the 15th day of the first month after the end of your fiscal year.
Changes in Income, Exemptions, etc.
If a change occurs, you may be required to make an estimated
payment even if you did not need to make payments earlier in
the year. Calendar year filers must file by:
•• June 15, 2022 – if changes occur after April 1 and before June 2;
•• September 15, 2022 – if changes occur after June 1 and before September 2;
•• January 17, 2023 – if changes occur after September 1.
Pay the estimated tax in equal installments on the remaining payment dates.
You do not need to submit a January 17, 2023, estimated pay- ment as long as you file your 2022 Income Tax return by Febru- ary 15, 2023, and pay the entire balance due.
Amended Estimated Payments
If the amount of your estimated tax changes, any remaining installments must be adjusted to reflect the change. Use the Amended Calculation Schedule on page 4 to determine the amount of your remaining installments.
Failure to Pay Estimated Tax
If an installment is filed after the due date, it does not affect the due date of the remaining installments. If you fail to pay all or any part of your required estimated tax, underpayment of esti- mated tax occurs. Interest is added to the underpayment amount for that period. See “Interest (Forms NJ-2210 and NJ-2210NR)” on page 3. The estate of a taxpayer who dies during the tax year may be required to start (or continue) filing estimated tax payments.