New Jersey's Income Tax Structure
New Jersey taxes your income using a progressive tax system, which means the rate you pay increases as your income increases. The state does not have a flat tax — instead, you move through tax brackets, and only the income within each bracket is taxed at that bracket's rate. New Jersey has six tax brackets for residents, ranging from 1.4% on the lowest incomes to 10.75% on the highest.
The specific rate you pay depends on your filing status (single, married filing jointly, head of household, or married filing separately) and your total taxable income for the year. New Jersey also taxes certain types of income differently — for example, long-term capital gains and dividends may be taxed at lower rates than wages and salary.
Key Takeaways
- New Jersey's income tax brackets range from 1.4% to 10.75%, with six different rates depending on your income level and filing status.
- Your tax bracket is determined by your total taxable income, and only income within each bracket is taxed at that bracket's rate.
- The income thresholds for each bracket change yearly to account for inflation, so you should check the current year's brackets before calculating your tax.
- New Jersey residents must file a state income tax return if their income exceeds the filing threshold for their filing status, even if they owe no tax.
- Certain types of income, such as Social Security benefits and some pension income, may be partially or fully exempt from New Jersey income tax.
The Six New Jersey Tax Brackets
For the 2024 tax year, New Jersey's six income tax brackets are 1.4%, 1.75%, 3.5%, 5.525%, 6.37%, and 10.75%. Each bracket applies to a specific range of income, and that range differs based on whether you file as single, married filing jointly, head of household, or married filing separately. The brackets are adjusted annually for inflation, so the income thresholds shift from year to year.
For example, if you file as single in 2024, the 1.4% rate applies to income up to roughly $22,000, the 1.75% rate applies to income between roughly $22,000 and $54,000, and so on. If you file as married filing jointly, those thresholds are higher. The highest bracket, 10.75%, applies to income above a certain threshold that varies by filing status — for single filers in 2024, this is roughly $500,000 and above.
Because the thresholds change each year, you should verify the current brackets on the New Jersey Division of Taxation website or your tax software before calculating what you owe. Using last year's brackets will give you an incorrect result.
How Your Filing Status Affects Your Tax Rate
Your filing status determines which income thresholds explore to you. Married couples filing jointly typically have higher income thresholds for each bracket than single filers, which means a married couple can earn more income in a lower bracket before moving to the next one. Head of household filers have thresholds between single and married filing jointly. Married filing separately has the narrowest thresholds and is rarely the best choice for tax purposes.
If your filing status changes during the year — for example, if you marry or divorce — you use the status that applies on December 31 of that tax year. This matters because it determines which brackets and thresholds you use when you file.
Income Types Taxed at Different Rates
Most of your income — wages, salary, self-employment income, and interest — is taxed as ordinary income at the rates in your bracket. However, New Jersey taxes long-term capital gains (profits from selling investments held more than one year) at lower rates than ordinary income. The capital gains rate structure has its own brackets and is more favorable than the ordinary income brackets.
may have access to dividends from stocks are also taxed at the capital gains rates rather than ordinary income rates. This distinction can matter significantly if you have investment income. Conversely, short-term capital gains (from selling investments held one year or less) are taxed as ordinary income at your regular bracket rate.
Some types of income are exempt from New Jersey tax entirely. Social Security benefits are not taxed by New Jersey. Certain pension and retirement income may also be exempt, depending on your age and the source of the income. You should review the New Jersey Division of Taxation guidance on your specific income sources to determine what is taxable.
Who Must File a New Jersey Income Tax Return
You must file a New Jersey income tax return if your income exceeds the filing threshold for your filing status. For 2024, the threshold for a single filer is roughly $22,000 in gross income, though this varies by filing status and age. If you are 65 or older, the threshold is higher. Even if you do not owe any tax, you may need to file to claim a refund of taxes withheld or to claim tax credits.
Residents of New Jersey are required to file even if they work in another state or have income from out of state. If you are a part-year resident (you moved to or from New Jersey during the year), you still file a New Jersey return, but you report only the income earned while you were a resident.
How to Find Your Exact Tax Bracket
To find your exact tax bracket, start by calculating your total taxable income for the year. This includes wages, self-employment income, interest, dividends, and capital gains, minus any deductions you are may have access to to claim. Then, locate the tax bracket table for your filing status on the New Jersey Division of Taxation website or in your tax software.
Find the row where your taxable income falls, and that row shows you the tax rate that applies to income in that bracket. Remember that you do not pay that rate on all your income — only on the income within that specific bracket. Your total tax is the sum of the tax owed in each bracket you fall into.
Most tax software calculates this automatically once you enter your income and filing status. If you are doing it by hand, the New Jersey Division of Taxation publishes detailed tax tables each year that show the exact tax owed at each income level, which removes the need to do the bracket math yourself.
Frequently Asked Questions
Does New Jersey tax Social Security income?
No. New Jersey does not tax Social Security benefits, even if you have other income. This is one of the few income types fully exempt from state tax. However, you may still need to file a return if your other income exceeds the filing threshold for your status.
What is the difference between my tax bracket and my effective tax rate?
Your tax bracket is the rate applied to your last dollar of income. Your effective tax rate is your total tax divided by your total income. Because New Jersey uses progressive brackets, your effective rate is always lower than your highest bracket rate. For example, you might be in the 6.37% bracket but have an effective rate of 3.8%.
Do I have to pay New Jersey income tax if I work in another state?
If you are a New Jersey resident, you owe tax on all your income, including income earned in other states. However, most states offer a credit for taxes paid to other states, so you do not pay tax twice on the same income. You file a New Jersey return and claim a credit for taxes paid to the other state.
Are retirement account contributions deductible from New Jersey income tax?
Contributions to traditional IRAs and 401(k) plans are deductible from your federal taxable income, but New Jersey does not allow a separate deduction for these contributions. You calculate New Jersey taxable income starting from your federal taxable income, so the deduction carries over. However, contributions to Roth accounts are not deductible at any level.
What happens if I move out of New Jersey during the year?
You file a part-year resident return and report only the income you earned while you were a New Jersey resident. The filing threshold and tax brackets for part-year residents are prorated based on the number of days you lived in the state. You will need to provide documentation of your move date, such as a lease or utility bill showing when you left.