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I was reminded of something by that earlier post about not filing. My sister, who always files her federal return, says she has not bothered to file a state return in over 8 years. Her reasoning is that she always gets a refund from the state, that the refund is miniscule and thus not worth the effort, and that the state does not care if she files a return or not as long as she does not owe them money. She is a bit stubborn, so I don't usually try to dissuade her, but if anyone here has some proof as to why you must file a state return, I'd love to hear it! And, thanks in advance for the posts!

Your sister has been very foolish in not filing her state income tax return. Unless her income level is quite high, she has missed out on increases in the Homestead rebate and real estate tax rebates. She has also been fortunate that NJ seems to be fairly inefficient at tracking down income tax deadbeats.

On the positive side, NJ has just announced a tax amnesty covering tax years from 1996 to the present. It will run from sometime in April until sometime in June (I don't remember the exact dates).

As I'm sure you know (assuming you file your NJ returns), NJ calculates taxable income differently from the federal government. It is very possible that her NJ taxable income could be significantly greater than her federal taxable income and she could be underpaying her income tax. There is no way to know without completing the return.

After the amnesty period is over, I would imagine that NJ may make a concerted effort to locate any outstanding delinquents.

Hope this helps somewhat.

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