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New Jersey defines gross income for part-year and nonresident returns as gross income had the taxpayer filed as a resident of New Jersey.

Part-year residents

If the taxpayer was a part-year resident of New Jersey and earned NJ income during their nonresidency period, you must file Form NJ-1040 for the period that they were a resident and a separate Form NJ-1040NR for the period that they earned New Jersey income as a nonresident. 

Data entry

1. On the return you are filing for the resident period, select File > Client Properties > New Jersey tab and indicate a part-year resident return. 
2. On the NJNRPY screen, enter the Part-year residency dates that the taxpayer lived in New Jersey. 
3. For any income you enter at the federal level, enter a NJ postal code for all income that was earned during the time the taxpayer was living in New Jersey.
4. Create a copy of the client by selecting File > Save as to create the second nonresident return. 
5. Change the residency status to Nonresident by selecting File > Client Properties > New Jersey tab. 
6. In the second (nonresident) return, remove the NJ postal code for all income that you indicated for the resident period in step 3. 
7. Enter the NJ postal code to any income that was earned in New Jersey while the taxpayer was a nonresident. 
8. File the first, part-year, return as you would normally with the federal return.
9. File the second, nonresident return as a state-only return. Note that you cannot e-file both returns. You must paper file the state-only return. 

Filing threshold

The application does not calculate tax on returns where the total of New Jersey gross income on Form NJ-1040, line 29 is less than $20,000 on MFJ returns or $10,000 on single or MFS returns. New Jersey defines gross income for part-year and nonresident returns as gross income had the taxpayer filed as a resident of New Jersey.

If the NJNRPY screen in the Income & Adjustments folder is blank, the application determines if the taxpayer has met the filing threshold by adding gross income amounts, not including nontaxable interest, from the Gross Income worksheet. If the return was filed as a resident, this calculation also excludes the retirement exclusion. 

Gross Income worksheet

The application calculates the Gross Income Worksheet based on postal codes you enter at the federal level. The New Jersey Source Amounts column is then adjusted for New Jersey law (for example, losses are limited to zero, and so on). Use form overrides to adjust amounts as needed. Form overrides made in these columns transfer through to the rest of the return regardless of the residency status. 

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