Division of TaxationThere may be ³Ô¹ÏºÚÁÏ Gross Income Tax obligations if you are a nonresident athlete, entertainer, worker, media consultant, or individual who performs services or participates in an event occurring in ³Ô¹ÏºÚÁÏ.
The ³Ô¹ÏºÚÁÏ Gross Income Tax Act imposes tax on nonresidents who earn income derived from sources within ³Ô¹ÏºÚÁÏ in connection with a trade, profession, occupation carried on in this State or for personal services performed in this State. ³Ô¹ÏºÚÁÏ does not provide for a de minimis exception for nonresident earnings. Any income that is sourced to ³Ô¹ÏºÚÁÏ is subject to employer withholding and is subject to tax when earned by a nonresident, so long as the nonresident’s income from everywhere meets the minimum filing threshold.
Example 1: Taxpayer A, a California resident, worked in ³Ô¹ÏºÚÁÏ as a media consultant for one month earning $22,000 in wage income. The taxpayer would generally be subject to ³Ô¹ÏºÚÁÏ Gross Income Tax as a nonresident and should file a ³Ô¹ÏºÚÁÏ Nonresident Income Tax Return (NJ-1040NR).
The ³Ô¹ÏºÚÁÏ source income of a nonresident individual who is a member of a professional athletic team is calculated based on the ratio of duty days spent within ³Ô¹ÏºÚÁÏ proportionate to the total number of duty days spent both within and without ³Ô¹ÏºÚÁÏ during the taxable year. Duty days include all days from the start of the team’s official preseason training through the final scheduled game, and also days on which a member renders services to the team, such as practice days, team meetings, promotional appearances, and rehabilitation activities conducted at team facilities.
Example 2: Player B, a member of a professional athletic team, is a nonresident of ³Ô¹ÏºÚÁÏ. Player B travels to ³Ô¹ÏºÚÁÏ to participate in a game for a world-wide sports event as a representative of B's team. The number of days B spends in ³Ô¹ÏºÚÁÏ for practice, the game, meetings, and other services for the team, count as duty days spent in ³Ô¹ÏºÚÁÏ for Player B for that tax year, as well as included in total duty days spent within and without ³Ô¹ÏºÚÁÏ.
Example 3: Player C, a member of a professional athletic team, is a nonresident of ³Ô¹ÏºÚÁÏ. Player C is not participating in the world-wide sports event and is not providing services for C's team in any manner. Player C is traveling to and attending such game solely as a spectator. The number of days Player C spends in ³Ô¹ÏºÚÁÏ for such game do not count as duty days spent in ³Ô¹ÏºÚÁÏ. However, such days may be included in the total duty days spent both within and without ³Ô¹ÏºÚÁÏ.
For additional information, definitions and examples, please see N.J.A.C. 18:35-5.1.
Eligible pass-through entities may file a Composite ³Ô¹ÏºÚÁÏ Nonresident Gross Income Tax Return (Form NJ-1080-C) on behalf of its qualified nonresident individual members. Please see N.J.A.C. 18:35-5.2.
Owners of unincorporated businesses, including sole proprietors or partners, are subject to ³Ô¹ÏºÚÁÏ Gross Income Tax based on their profits from their services performed in ³Ô¹ÏºÚÁÏ. Corporations are subject instead to the ³Ô¹ÏºÚÁÏ Corporation Business Tax.
For additional information on nonresident filing requirements, please see the GIT-6 Part Year Residents and Nonresidents .
For additional information regarding income tax withholding, please see the ³Ô¹ÏºÚÁÏ Income Tax Withholding Instructions (NJ-WT) .