To comply with New Jersey income tax law you must make the following adjustments to your Federal Schedule C (or C-EZ or F):
1. Add any amount you deducted for taxes based on income.
2. Subtract interest you reported on Federal Schedule C (or C‑EZ or F) which is exempt
for New Jersey purposes but taxable for Federal purposes.
3. Add interest not reported on Federal Schedule C (or C-EZ or F) from states or political subdivisions outside of New Jersey which is exempt for Federal purposes.
4. Deduct the remaining 50% of meal and entertainment expenses (that were disallowed on the Federal return).
5. Deduct your qualified contributions to a self-employed 401(k) plan. Contributions to a plan in excess of the Federal limits, which are not an
allowable deduction for Federal tax purposes, are also not deductible for New Jersey purposes.
6. Add interest and dividends derived in the conduct of a trade or business.
7. Add or subtract income or losses derived in the conduct of a trade or business from rentals, royalties, patents, or copyrights.
8. Add or subtract gains or losses from the sale, exchange, or other disposition of the trade or business’s property.
9. Add or subtract the net adjustment from the Gross Income Tax Depreciation Adjustment Worksheet GIT‑DEP, Part 1, line 7. Be sure to retain the completed worksheet for your records.
10. Subtract the New Jersey allowable IRC Section 199 deduction, which must be calculated on Form 501‑GIT, Domestic Production Activities Deduction.
Sole proprietors engaged in providing “primary care” medical and/or dental services at a qualified practice located in or within five miles of a designated Health Enterprise Zone (HEZ) may qualify for a deduction on Line 33. For information on eligibility requirements and how to calculate the HEZ deduction, see Division Technical Bulletin TB-56. Anyone engaged in a business, trade, profession, or occupation in New Jersey must register with the State for tax purposes by filing a Business Registration Application, Form NJ-REG. Form NJ‑REG may be filed online through the Division of Revenue and Enterprise Services’ NJ Business Gateway Services at: www.state.nj.us/treasury/revenue/.