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Screens

Screen NJK1T - New Jersey Trust and Estate Income (1040)

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Overview

Use this screen to calculate other income from trusts and estates. Data entered on the federal K1T and K1St screens will transfer to the screen. Information from this screen is used to calculate the New Jersey Trust and Estate Income Summary Worksheet.

General Information

New Jersey taxes ordinary trusts as "Other Income." Grantor trust income must be taxed as the specific New Jersey income category like interest, partnership income, or net gains from rent. The net New Jersey income should be entered on the federal K1T screen in the
Ordinary business Income
 field for all trusts. Use the NJK1T screen as follows:
  • For a Non-Grantor trust: no data entry is required the amounts entered as "Ordinary Business" will transfer to the
    Net income from estate or trust
     field and the amounts will be taxed as "Other Income" per New Jersey Law.
  • For a Grantor trust: the entire amount that transfers to the
    Net income from estate or trust
     field should be allocated into the appropriate income category.
  • For a mixed trust K-1 only allocate the portion of the
    Net income from estate or trust
     related to the Grantor portion of the trust.
note
You can't enter the details on the trust screens at the federal level because a federal K-1 doesn't break out income using the same categories as New Jersey.

Beneficiary Share of Income

Information in this section transfers from the federal K1T screen and is used to calculate the New Jersey Trust and Estate Income Summary Worksheet. The All Sources column is transferred from the
Ordinary Income
 field State if different column in the federal K1T screen. For nonresident returns / part-year resident returns, the All Sources column is entered in the federal K1-St screen as Ordinary income everywhere. The New Jersey Source column is available for nonresident / part-year resident returns only and is transferred from the
Ordinary income
 field State if different column in the federal K1T screen.
Enter the amount reported as Net income from the New Jersey K-1 (Form NJ-1041). This amount will be reported as Other Income on the NJ-1040 or the NJ-1040NR. This amount shouldn't include any income reported as grantor trust income.

Grantor's Share of Income

New Jersey grantor trust income is reported based on the category of income earned, such as rental or partnership. The federal K-1 doesn't specify in detail which type of business income the trust receives.
Beneficiary income originating from grantor trusts that are data shared from UltraTax/1041-NJ are reported in the specific income categories designated in this section.
The 2012 law change allows an adjustment to income under the Alternative Business Calculation which is based on the net business loss from net profits from business, distributed share of partnership income, net-pro rata share of S Corporation income and net gains or net income from rents, royalties, patents and copyrights. Losses should be entered in this screen. Losses won't be reported on the
2024
 return, but are used to calculate the Alternative Business Increment Deduction for
2024
 and the Alternative Business Increment Deduction in
2025
 on the Tax Project Worksheet.

Dispositions

Use this section to calculate the amount of taxable income derived from a disposition of assets.
Gain (loss) from dispositions adjusted for New Jersey depreciation
Unless the entire business unit has been fully disposed as indicated by a disposal code of
1
 or
2
 entered in the equivalent federal screen, dispositions that can be identified to a particular unit of the NJC, NJF, NJK1, NJ4835, NJK1T, or NJRent screens are gathered and adjusted for differences in federal vs. New Jersey depreciation. These amounts are then added to this unit’s net income or loss and reported as such on the New Jersey return. Use this field to override the calculated amount.
Amount to be adjusted out of other net gains
The amount calculated on federal Form 4797 for ordinary gains is reduced for those dispositions that are business related or otherwise identified as dispositions reported as business, rental, partnership, S Corporation, or trust and estate gains. The amount appearing in the Calculated column is the gain or loss attributable to this unit as if it were reported on federal Form 4797 (not adjusted for New Jersey depreciation differences). Amounts not appearing in this field are treated as dispositions of a personal nature and are reported as other net gains on Form NJ-1040, Schedules A and B, Schedule B for resident returns, or on Form NJ-1040NR, Page 3, Part I for nonresident returns. Every effort has been made to capture all amounts necessary for this calculation. Some gains related to mass dispositions, casualty, and theft, as well as prior year installment gains, aren't available for transfer as either identifiable to a particular activity unit or aren't available as adjusted for New Jersey basis. Use this field to override the calculated amount.
note
Business related dispositions are reported as business related income. See the worksheets for business income, farm income, partnership income, S Corporation income, farm rental income, and trust and estate income. If this unit has been disposed of in its entirety, the gain / loss from disposition is reported as other net gains on Schedule B for resident returns or on Part I for nonresident returns.

Taxes Paid

Use these fields to indicate the details from New Jersey NJK-1 (Form NJ-1041). Enter the total
Beneficiaries Tax Paid
, and
Grantor Tax Paid
 from the NJK1 (Form NJ-1041) on the federal K1T-2 screen in the
Trust paid state estimated tax
 or
Credit for state backup withholding
, then allocate the amounts as appropriate on the New Jersey K1T screen. Any return with payment made through the trust will need to be paper filed with the NJK1 (Form NJ-1041) attached.

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