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Bill

A 4864

Allows gross income taxpayers to claim deduction for certain losses for which federal theft loss deduction is allowed.

2026-2027 Regular Session Introduced by Clinton Calabrese

Allows New Jersey gross income taxpayers to deduct certain theft losses, aligning state treatment with federal theft loss provisions.

Introduced, Referred to Assembly Public Safety and Preparedness Committee
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Bill Summary · A 4864

Bill Summary: A 4864 (New Jersey, 2026)

Title

Allows gross income taxpayers to claim deduction for certain losses for which federal theft loss deduction is allowed.

Purpose and Intent

This bill seeks to align New Jersey gross income tax treatment with federal tax rules by allowing individual taxpayers to deduct certain losses that the federal theft loss deduction permits. The aim is to provide parity between federal and state tax treatment for qualifying theft-related losses.

Key Provisions (Proposed)

  • Deduction Eligibility: Allows gross income taxpayers to claim a deduction on their New Jersey gross income tax return for certain losses that are eligible under the federal theft loss deduction provisions.
  • Loss Types Covered: The bill references losses that qualify for the federal theft loss deduction. While the text available does not enumerate every category, typical federal theft loss deductions cover losses from theft or similar criminal acts that are recoverable or partially compensated, subject to federal rules and limitations.
  • Interaction with Federal Rules: The deduction would be allowed to the extent permitted by federal law, potentially coordinating timing and basis with federal theft loss treatment. The bill does not specify a separate federal/state computation method, implying alignment with existing federal theft loss eligibility.
  • Taxpayer Scope: Applies to gross income taxpayers in New Jersey, i.e., individual taxpayers subject to New Jersey gross income tax.

Who Is Affected

  • Individual New Jersey Taxpayers: Those who experience qualifying theft-related losses that are deductible under federal tax law and who itemize or claim deductions on their New Jersey returns (consistent with how the New Jersey gross income tax system handles deductions related to losses).
  • Tax Preparation and Compliance: Affected may include taxpayers who previously could not deduct certain theft losses at the state level, now potentially eligible to claim a state deduction mirroring federal treatment.

Procedural and Timeline Aspects

  • Introduced and Referral: Introduced May 4, 2026, and referred to the Assembly Public Safety and Preparedness Committee.
  • Sponsors: Co-sponsored by Assemblymember Clinton Calabrese.
  • Next Steps in Process: As with typical bills, progress depends on committee review, potential amendments, passage by both chambers, and signature by the Governor.

Potential Impact (General Considerations)

  • Tax Savings: If enacted, eligible taxpayers may see a deduction on New Jersey gross income tax for losses that federal rules permit to be deducted as theft losses. The magnitude would depend on the number of eligible taxpayers and the size of qualifying losses.
  • Administrative Considerations: Taxpayers and stakeholders may need guidance on what constitutes a qualifying theft loss for state purposes and how to calculate the deduction in alignment with federal rules.
  • Policy Implications: The bill reflects a policy choice to harmonize state treatment with federal theft loss provisions, potentially reducing disparities between federal and state tax outcomes for certain criminal-loss scenarios.

If you’d like, I can add specifics once the bill’s text is available, including the exact definitions, deduction limits, carryforward provisions (if any), and interaction with other New Jersey loss deduction rules.

Compiled from official sources — confirm details with the bill’s official record.

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