This bill allows resident taxpayers in New Jersey who experience a theft loss, for which a federal theft loss deduction is permitted, to claim a corresponding deduction on their state gross income tax. The deduction will be equal to the amount allowed under federal law, specifically referencing paragraphs (2) or (3) of subsection (c) of section 165 of the federal Internal Revenue Code. However, the bill stipulates that no deduction will be permitted for any costs, expenses, or losses that are already included in the calculation of any category of income that is net of expenses, or in the calculation of any other deductions, credits, or exemptions for the taxable year in which the deduction is claimed.

Additionally, the bill clarifies that the definition of theft for the purposes of this deduction aligns with the federal definition, encompassing various forms of appropriation of another's property, including theft by swindling, false pretenses, larceny, and embezzlement. The act is set to take effect on January 1 following its enactment.