New Jersey

Sales Tax

  • Statewide: 6.625%
  • Counties cannot levy any additional sales tax.
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt
    • Clothing: Exempt
  • Gasoline Tax: 69.10 cents/gallon (Includes all state, local and federal taxes)
  • Diesel Fuel Tax: 82.10 cents/gallon (Includes all state, local and federal taxes)
  • Urban Enterprise Zones are allowed tax relief by allowing some goods to be exempt and allowing qualified retailers to charge 3.475% instead of 6.625%.

 

Personal Income Tax

  • Personal Income Tax Rate Range: Seven brackets (eight for Married Filing Jointly) from 1.4% to 10.75% (top rate on income greater than $1,000,000)
  • Standard deduction: None
  • Personal Exemption Allowance: $1,000. Dependent Exemption: $1,500, Veterans $6,000
  • Itemized Deductions Allowed?: Yes, with exceptions
  • Retirement Income
    • Social Security: Exempt
    • IRAs: Taxable at ordinary income tax rates*
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates*
    • Private pensions: Taxable at ordinary income tax rates*
    • Public Pensions: Taxable at ordinary income tax rates* (not taxable before age 65)
  • Military Pay
    • Active Duty Pay: Taxable (combat-zone pay not taxable by the state if received in 2021 or later)
    • Military Retirement Pay: Exempt
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SBP/SSBP/RCSBP/RSFPP: Exempt
Income Tax Comments: *Taxpayer 62 or older with income $150,000 or less can exclude up to $75,000 ($100,000 married filing jointly), income between $100,001 and $125,000 can deduct 37.5% if single (50% married filing jointly), income between $125,001 and $150,000 can deduct 18.75% single (25% married filing jointly). State allows county- and city-level income tax.  

 

Property Tax

  • Local municipalities average 2.49% of the property's assessed value.
  • Calculation of assessed value: 100% of fair market value
  • Relief programs for:
    • Owner-occupied: Credit programs available based on income.
    • 65 and over or Disabled: May be eligible for tax credit of up to $500 if income less than $150,000. Can be reimbursed for property tax increases based on income (cannot exceed $92,969) and residency requirements. Credits of up to $250 available if income under $10,000.
    • Veterans/Unremarried Surviving Spouse: Tax credit of up to $250 available. 
    • Disabled Veterans/Unremarried Surviving Spouse: Full exemption if 100% service-connected disability.  
  • Personal Property Tax: Yes. Rates and exemptions vary.

 

Inheritance & Estate Taxes: Estate tax has been repealed for deaths after Jan. 1, 2018. Deaths prior to that may owe estate tax. Exemptions for some family available. Inheritance tax on $500 or more up to 16%; some family members are exempt.

 

Department of Revenue website: www.state.nj.us/treasury/revenue/

More Financial Guidance From MOAA 

Premium and Life members can consult our financial staff for education and consumer advice.

 

Looking to get more out of your membership? MOAA has more than 400 chapters around the country. Get involved in your community by finding the one closest to you and joining today! 


Financial Resources Join a Chapter

Search