The State of New Jersey recently announced a $3,000 exemption on income tax returns for military veterans who were honorably discharged or released under honorable circumstances from active duty in the Armed Forces of the United States on or any time before the last day of the tax year. Spouses (or civil union partners) are also eligible for an exemption if he/she is a veteran who was honorably discharged or released under honorable circumstances and you are filing a joint return.
This exemption is available on both resident and nonresident returns and is in addition to any other exemptions you are entitled to claim. You cannot claim this exemption for a domestic partner or for your dependents.
When completing your tax return, you must fill in the oval (resident return) or check the box (nonresident return) to indicate that you are claiming this exemption. Otherwise, the exemption will be disallowed.
You must also provide official documentation showing that you were honorably discharged or released under honorable circumstances from active duty. You only need to submit a copy of your records the first time you claim the exemption. You do not need to provide this documentation each year. The most common form of documentation provided is a copy of your Certificate of Release or Discharge from Active Duty, DD-214.
Click here for complete details and instructions. Note that you can certify for the exemption by sending your documentation and Veteran Income Tax Exemption Submission Form 183 kb to the Division before you file, which may help process your return faster.