Reporting K-1 income
New Jersey law requires that pass-through entities supply a New Jersey Schedule K-1 showing the income calculated under New Jersey law, that's then reported on the individual's New Jersey return.
In scenarios where the pass-through entity didn't issue the taxpayer a New Jersey Schedule K-1, worksheets are available to calculate the New Jersey income according to Publication GIT-9P and GIT-9S. Follow UltraTax CS's data entry steps based on how the New Jersey income is reported to the taxpayer.
Taxpayer received NJ Schedule K-1
If a taxpayer has a New Jersey Schedule K-1 from either an S corporation or partnership and it was prepared in UltraTax CS, the New Jersey information will data share into the individual New Jersey return.
If the New Jersey Schedule K-1 wasn't prepared in UltraTax CS, enter the following data:
Residents
- If the taxpayer is a resident of New Jersey, enter the S corporation NJ Schedule K-1, line 3, or partnership NJ Schedule K-1, line 4, column A, on the federalK1-2screen in theOrdinary business income - State, if differentfield, or in the NJ column of the allocation grid.
Part-year or nonresidents
- If the taxpayer is a part-year resident or nonresident of New Jersey, enter the S corporation NJ Schedule K-1, line 3, or partnership NJ Schedule K-1, line 4, column A, on the federalK1-Stscreen in theOrdinary income everywhere (New Jersey)field.
- On the federalK1-2screen, enter the New Jersey source amount from the S-corp NJ K-1, line 1, or partnership NJ K-1, line 4, column B, in theOrdinary business income - State, if differentfield.
note
If the K-1 is coded to a state other than New Jersey (via the
State postal code
field) enter the New Jersey source amount in the Allocation grid.Taxpayer didn't receive NJ Schedule K-1
If the taxpayer doesn't have a New Jersey Schedule K-1, you'll need to convert the federal Schedule K-1 income into New Jersey income based on the Publication GIT-9S for an S corporation, or GIT-9P for a partnership.
Worksheets are available to help you calculate NJ income. The worksheets calculate based on the GIT-9S/GIT-9P instructions and will generate when the State, if different columns are blank on the federal input screens for K1.
Amounts entered in the federal columns of the federal K1 through K1-7 screens will transfer to the
NJK1Wrk
screen, in the New Jersey K1 1065, 1120S
folder. Additional data entry is required on this input screen for an accurate calculation since some adjustments aren't applicable (thus no fields are available in the federal input screens) to the federal K-1. You can also overrule amounts that transfer to this screen based on data acquired from the S-corporation or partnership.note
In UltraTax CS 2015 and earlier, the worksheets are available in the
Non-calculating
folder.Part-year residents:
UltraTax CS will automatically prorate the federal K-1 amounts that transfer to New Jersey when part-year residency dates are entered in the NJNRPY
screen in the Income & Adjustments
folder.
restriction
If amounts are also entered in the
State, if different
columns for NJ, the worksheet won't calculate.If the taxpayer doesn't have a New Jersey Schedule K-1 and you don't want to use the worksheets to convert K-1 income into New Jersey source amounts, enter code
2
in the Source of New Jersey K-1 income
field on the NJK1
screen and follow the preceding data entry steps as if the taxpayer had received a New Jersey K-1, using the net taxable amount instead. Internal use only
- There's no need to answer legal questions on the worksheet.
- The main purpose of theSource of New Jersey K-1 incomefield on theNJK1screen is to control the calculation of the worksheet. When a user calls and asks, "How did we calculate K-1 income?" you can go to this field and answer the question based on the number there. If the field is blank, the unit may be inactive for the year. Otherwise, we used whatever amount they entered on theOrdinary business income, State if differentfield on the federalK1-2screen.
- If theOrdinary income everywhere (New Jersey)field is grayed out on theK1-Stscreen, the K1 is coded to another state other than New Jersey and multiple units of theK1-Stscreen will create for each state. Make sure you're on the NJ unit.
