Medical Expenses
You may deduct certain medical expenses that you paid during the year for yourself, your spouse/civil union partner or domestic partner, and your dependents. However, you cannot deduct expenses for which you were reimbursed. Only expenses in excess of 2% of your income may be deducted. You may also deduct qualified Archer MSA contributions and certain health insurance costs if you are self-employed. Use Worksheet E on page 28 to calculate your deduction.
Allowable Medical Expenses. Medical expenses means nonreimbursed paymentsfor physicians, dental and other medicalfees, prescription eyeglasses and contactlenses, hospital care, nursing care,medicinesand drugs, prosthetic devices,X-rays,and other diagnostic servicesconductedby or directed by a physicianordentist. In addition, medical expensesmayalso include amounts paid for transportationprimarily for and essential tomedicalcare and insurance (includingamountspaid as premiums under Part BofTitleXVIII of the Social Security Act,relatingto supplementary medical insurancefor the aged) covering medical care.Asa general rule, medical expenses allowedfor Federal income tax purposeswillbe allowed for New Jersey incometaxpurposes.
Archer MSA Contributions. Enter on line 4, Worksheet E the amount of your qualified Archer MSA contributions from Federal Form 8853. New Jersey follows the Federal rules for this deduction. Your contribution may not exceed 75% of the amount of your annual health plan deductible (65% if you have a self-only plan). Enclose Federal Form 8853 with your return. Excess contributions that you withdraw before the due date of your tax return are not taxable. However, you must report the earnings associated with the excess contributions you withdraw as wages on Line 14.
Self-Employed Health Insurance Deduction. If you are considered a selfemployed individual for Federal income tax purposes, or you received wages in 2014 from an S corporation in which you were a more-than-2% shareholder, you may deduct the amount you paid during the year for health insurance for yourself, your spouse/civil union partner or domestic partner, and your dependents.
The amount of the deduction may not exceed the amount of your earned income, as defined for Federal income tax purposes, derived from the business under which the insurance plan is established. You may not deduct any amounts paid for health insurance coverage for any month during the year in which you were eligible to participate in any subsidized health plan maintained by your (or your spouse’s/civil union partner’s or domestic partner’s) employer
Note: For Federal purposes you may be able to deduct amounts paid for health insurance for any child of yours who was under age 27 at the end of 2014. However, for New Jersey purposes you may deduct such amounts only if the child was your dependent. For more information see Division Technical Advisory Memorandum TAM 2011-14.