By Deborah Adamson
Advertiser Staff Writer
Q: I just recently served as a juror in a state criminal trial on Maui and would like to know if I have to report my jury pay on my federal or state 2004 income tax return. Edward A. Panui, Kaunakakai, Moloka'i
A: It's commendable that you did your civic duty by serving on a jury. Now, here's another chance to do something for your country pay taxes on the payments received from jury service.
Yes, you have to report it on your federal tax return, according to John Lipold, a spokes-man for the Internal Revenue Service in Washington, D.C. Report it as "other income" on line 21 of form 1040 for tax year 2004. You cannot use the 1040EZ or 1040A.
You have to pay state taxes on jury pay as well, said John Molay, a tax attorney for the Hawai'i Department of Taxation. But you don't have to do anything extra. Since the federal adjusted gross income is transferred to the state tax form N-11, jury duty income is automatically reflected.
If you have to surrender your jury pay to your employer so you can keep receiving your salary, you still have to report it on line 21, said Dick Freitas, a Honolulu certified public accountant and president of the Hawaii Society of Certified Public Accountants.
But then subtract the income on line 35 of the 1040 form. Since you didn't get to keep the income, you don't have to pay taxes on it. Write out "jury duty" and the amount subject to taxes on the dotted line and add it to other income adjustments (lines 23 to 34a), Freitas said.
Maui County pays $30 a day or $15 for half a day of jury service.
Since you live on Moloka'i, you had to fly to Maui for the trial. Maui reimburses jurors for airfare, the cost to take a taxi to and from the airport and two meals a day up to a maximum amount. You get a hotel voucher if you stay overnight. In addition, you are eligible for 33 cents a mile driving to and from your home to the airport in Moloka'i.
Patrick Ing, a certified public accountant in Wailuku, said jury duty pay is taxable. But reimbursements that require receipts or detailed records generally are not subject to federal or state taxes.
As for mileage, a tax court memorandum in 1968, which hasn't been overturned, ruled that mileage reimbursements are not taxable for jurors,
Freitas and Ing said. As such, Freitas believes jurors don't have to report any money received for mileage.
For more information, call the state at 587-1786 or the IRS at (800) 829-1040.
Reach Deborah Adamson at firstname.lastname@example.org or 525-8088.
Note: The Akamai Money column on Nov. 25 contained two errors related to federal tax exemptions and the Roth IRA. The column should have said taxpayers 65 or older can claim an additional exemption on Hawai'i state income tax returns but do not get an additional exemption on federal income tax returns. Also, you don't have to start withdrawing from a Roth IRA when you reach 70 1/2 years old.