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Delta,

Welcome to the Garden State and our wonderful income tax. (NOT!) Basically NJ medical deductions are the same as federal, in terms of what qualifies. All of your insurance premiums, expenses, etc. FSA contributions do not count, but the expenses paid by the FSA do count, if they would count as federal medical expenses had they not been paid via FSA. In other words, some FSA accounts allow reimbursement for OTC medications and other medical expenses that aren't ordinarily deductible. Those expenses are not deductible in NJ either. But FSA reimbursements for things like copays, insurance deductibles, etc. count.

Remember that the 2% haircut isn't 2% of your AGI, it's 2% of your NJ income.

As a separate issue, if you have income from partnerships, estates, trusts, etc. they are handled very differently in NJ than on the federal return. They are a separate class of income and lose the interest, dividend, capital gain, etc. character that appears on the federal K-1. So make sure you don't double report the income.

Also, if you contribute to an IRA account, your contribution is not deductible. So keep track of your basis in your records so that you won't pay tax on the basis when you take distributions in the distant future.

Ira
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