Bill Text: NJ A1431 | 2024-2025 | Regular Session | Introduced
Bill Title: Establishes NJ Gross Income Tax EasyFile Program; pilot program to allow Division of Taxation to prepare gross income tax return forms for certain taxpayers.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced) 2024-06-03 - Reported and Referred to Assembly Appropriations Committee [A1431 Detail]
Download: New_Jersey-2024-A1431-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblyman ROBERT J. KARABINCHAK
District 18 (Middlesex)
SYNOPSIS
Establishes NJ Gross Income Tax EasyFile Program; pilot program to allow Division of Taxation to prepare gross income tax return forms for certain taxpayers.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act establishing a State pilot program to allow the Division of Taxation to prepare gross income tax return forms for certain taxpayers, supplementing Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. The Director of the Division of Taxation in the Department of the Treasury shall establish a pilot program known as the NJ Gross Income Tax EasyFile Program that implements a gross income tax final return filing system that provides a simplified personal income tax return in both a printable document form and in a computer-readable form that a taxpayer, whom the director determines may be eligible, may elect to file and that is pre-filled by the division with the eligible taxpayer's information available to the division other than by way of submission of the information directly by the taxpayer. The pre-filled personal income tax return shall include the taxpayer's personal, wage and other information from the taxpayer's gross income tax withholding information, as well as the taxpayer's calculated deduction, and set forth tax liability information for a taxpayer who is required to file an income tax return under N.J.S.54A:8-3.1, if the taxpayer meets those conditions as may be applied to the filing system as the director determines, which may include the following:
(1) The taxpayer is not self-employed for any part of the taxable year and prior taxable year for which the taxpayer receives a pre-filled personal income tax return form pursuant to this section;
(2) The taxpayer is employed at a business location in this State during the taxable year and prior taxable year for which the taxpayer receives a pre-filled personal income tax return form pursuant to this section;
(3) The taxpayer's annual income is less than $75,000 and the taxpayer is a resident of New Jersey for the entire taxable year and the entire prior taxable year for which the taxpayer receives a pre-filled personal income tax return form pursuant to this section;
(4) The taxpayer filed a New Jersey tax return as a resident taxpayer pursuant to subsection b. of N.J.S.54A:2-1, excluding an estate or trust, with no dependents in the taxable year prior to the taxable year for which the taxpayer receives a pre-filled personal income tax return form pursuant to this section, and the taxpayer's dependent or filing status does not change during the taxable year for which the taxpayer receives a pre-filled personal income tax return form pursuant to this section; and
(5) The taxpayer's income for the taxable year prior to the taxable year for which the taxpayer receives a pre-filled personal income tax return form pursuant to this section came only from wages found on the taxpayer's federal Internal Revenue Service W-2 form provided by the taxpayer's employer.
b. (1) The taxpayer may for any reason choose not to use the pre-filled personal income tax return form without any negative inference drawn by the division for that taxpayer's choice, and the taxpayer may prepare and file an appropriate personal income tax return instead under any other allowable method, but choosing not to use the pre-filled form shall not exempt the taxpayer from any tax liability;
(2) The taxpayer shall be responsible for verifying information on the pre-filled personal income tax return form before signing and returning the pre-filled form and, if information on the pre-filled form is inaccurate, the taxpayer shall correct the information on the pre-filled form, pursuant to instructions the director shall provide with the pre-filled form;
(3) If the taxpayer files an incorrect pre-filled personal income tax return form the taxpayer shall be liable for any applicable penalties under N.J.S.54A:9-6, notwithstanding the provisions of subsection b. of section 6 of P.L.1975, c.177 (C.54:49-11);
(4) The director shall establish a secure website and a telephone help hotline so that taxpayers may access and file the pre-filled form securely via the internet or telephone, and complete the pre-filled return free of charge in a manner that does not require the use of any third-party proprietary online filing software;
(5) The director shall mail, or provide these forms electronically through the website, to taxpayers by March 15 of the year immediately following the close of the applicable taxable year;
(6) The completed and signed tax return shall be due in accordance with N.J.S.54A:8-1;
(7) The director shall provide the information contained in this section to the taxpayer in clear, large point font on instructions accompanying the pre-filled form, make reasonable efforts to ease a taxpayer's compliance burden in completing the pre-filled return, and shall provide to taxpayers a description of the pre-filled return program that shall include, but may not be limited to the following statement that is prominently displayed in the mailed or website provided form:
"This Pre-Filled personal
income tax return form gives a taxpayer access to the wage data received by the
Division of Taxation from a taxpayer's employer. It gives a taxpayer the option
of viewing or filing a pre-filled return. A pre-filled return is a completed
tax return that is based on the following: wage data received from an employer,
the taxpayer's filing status from the prior year, amounts withheld by the
employer, and additional taxes owed to the state or refund owed to the
taxpayer."
Immediately below this description and in boldface type and in a large font, the director shall include the following statement:
"The Pre-Filled Return Program is an optional service for the convenience of taxpayers with simple returns. You are under absolutely no requirement to use this program. You may choose not to look at the printed or online program, or to look at the printed or online program and not file the Pre-Filled Return. If you choose not to view or file a Pre-Filled Return, this will not affect your tax liability in any way."; and
(8) Within six months after
the end of the second taxable year in which the director has implemented a pilot
program for the pre-filled personal income tax final return filing system
established pursuant to this act, the director shall submit to the Governor and
the Legislature pursuant to section 2 of P.L.1991, c.164
(C.52:14-19.1) a report evaluating the pilot program including but not limited
to a description of the scope of the pilot program, a measure of taxpayer
filing burden reduction of participating taxpayers, rates of acceptance of
participation in the pilot program by eligible taxpayers, and a measure of
processing efficiency and the cost savings experience of the division pursuant
to the pilot program in comparison to other allowable gross income tax return
filing methods. The director may include in the report any recommendations for
legislation that will improve or facilitate an expansion of the pilot program
to include additional taxpayers for eligibility to participate.
2. This act shall take effect immediately and shall apply to taxable years beginning after enactment.
STATEMENT
This bill establishes a State pilot program known as the NJ Gross Income Tax EasyFile Program to allow the Division of Taxation in the Department of the Treasury to prepare gross income tax return forms for certain taxpayers. The pilot program will implement a New Jersey gross income tax final return filing system that provides a simplified personal income tax return form that eligible taxpayers may elect to file, that is pre-filled by the division with information the division has available from the taxpayer's employer. The "pre-filled" tax returns will contain all the gross income tax data contained in a taxpayer's W-2 form.
Taxpayers who qualify to receive the forms are "wage or salary only" earners, meaning that most of the information they supply on their New Jersey income tax returns comes solely from their employer W-2 forms. They must be "wage only" earners in the previous taxable year. However, for the applicable taxable year, the director may determine other conditions that may be applied to the simplified filing system.
To receive the forms, taxpayers must also meet the following criteria for the applicable and previous tax year: are employed in New Jersey, are not self-employed, be a full-time resident all year, earn less than $75,000, have no dependents and use a single or "married, filing separate" filing status on their New Jersey gross income tax returns. The bill lists requirements for information provided on the forms, including notice of voluntary use of the forms by taxpayers and instructions for corrections to the form. The bill also allows taxpayers to submit the pre-filled returns via mail, telephone, or a secure internet website. The NJ Gross Income Tax EasyFile Program will not require the use of any third-party proprietary online filing software. The Director of the Division of Taxation will mail the forms to qualified taxpayers after the division receives New Jersey employee taxpayer withholding information (W-2).
The bill aids taxpayers and the State by making filing a State return more convenient for certain taxpayers, and enables them to avoid the cost of private tax preparers, commercial software and the burden of completing complicated forms. Due to the ease of filing, taxpayers will likely return the completed forms back to the State well before the filing deadline and will help ensure the correct tax is paid by taxpayers. If the State receives these correctly completed returns earlier, it may have an earlier indication of final payments of gross income taxes and may better be able to forecast annual income tax revenue collections for budgeting purposes.
California has successfully implemented a pilot program of pre-completed tax returns. In addition, other countries, such as Great Britain and Germany, have used similar forms for years. This bill may begin the process of making New Jersey's personal income tax collection process more streamlined and possibly more predictable.
