Mandatory pension contribution

[jacqui0822]

Jurisdiction

New Jersey

I am a teacher in Edison, NJ and I have $348 taken our twice a month for mandatory pension contribution. Should this be subtracted from my gross income since I will not get that until I retire?

 

[adjusterjack]

If it's a qualified tax deferred plan (likely) then it should be shown as a non-taxable portion of your earnings on your W-2 (reducing your taxable income) and doesn't get shown on your 1040.

Your pension plan booklet should explain that to you.

 

[hrforme]

by any chance are you talking about the definition of "disposable earnings" that child support is being calculated on? Since you are talking about Child Support..I am assuming that is your perspective. Here's what I found:

"New Jersey follows the Consumer Credit Protection Act (CCPA) when determining a noncustodial parent's wage garnishment limits. To determine the portion of the noncustodial parent's earnings that are subject to these limits, the employer should first subtract all of the legally required deductions from the employee's wages. Legally required deductions are limited to income taxes, Social Security and Medicare taxes, mandatory state disability or unemployment insurance, mandatory state pension contributions for public-sector employees, and mandatory contributions under the Railroad Retirement Act. All other deductions made from the noncustodial parent's wages will be considered voluntary for the purpose of child support withholding.

Once the legally required deductions are made, the noncustodial parent's "disposable earnings" remain. These disposable earnings are subject to the following maximum withholding limits under New Jersey law and the CCPA:

• 50% if the employee supports a second family;
• 55% if the employee supports a second family and owes more than twelve weeks of back support;
• 60% if the employee does not support a second family; and
• 65% if the employee does not support a second family and does not owe more than twelve weeks of back support.

When an employee is subject to more than one order, and the maximum applicable percentage for each differs, the higher of the percentages should be applied to both orders.



Read more: http://family-law.freeadvice.com/family-law/child_support/new-jersey-child-support-garnishment-limits-exemptions-protections.htm#ixzz4Sq6ubk4c
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