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New Jersey, 403b, 457b contribution and distribution taxes

With the richer Tax Analytics functionality and tax jurisdiction support in 4.4.0, I found an issue. Per https://www.nj.gov/treasury/taxation/njit5.shtml, “New Jersey does not allow you to exclude from wages amounts you contribute to deferred compensation and retirement plans, other than 401(k) Plans.” This means that 403(b) contributions are taxed (ugh!). The 401k/403b investment card would need to be expanded to allow the user to specify which of the two plans it is (or just break out this card into two separate cards, but that may clutter the UI more). Then the tax logic would need to be modified to not make 403b contributions taxable in NJ. Per Gemini, NJ is the only state that does this. Joy!

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Tagged as Suggestion

Suggested 01 October by user Mark S.

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  • 01 October Mark S. suggested this task

  • avatar

    Typo: “taxable” in “the tax logic would need to be modified to not make 403b contributions taxable in NJ” should be “deductible.”

    01 October
  • avatar

    In the reference I linked, 457 plans are not tax-deferred either in NJ. Or even IRAs. Mind blown. To add a twist, “Employer contributions to these plans receive tax-deferred treatment.”

    01 October
  • 02 October Shawn Sansom edited this task

  • 02 October Shawn Sansom approved this task