New Jersey taxes your income at rates between 1.4% and 10.75%, depending on how much you earn

New Jersey has a progressive income tax system, meaning the tax rate increases as your income goes up. You do not pay the top rate on all your income — you pay different rates on different portions. A single filer earning $30,000 pays roughly 3.07% overall. A single filer earning $100,000 pays roughly 5.97% overall. The state uses federal taxable income as its starting point, then applies New Jersey's own rules and deductions.

New Jersey residents must file a state tax return if they earn above a certain threshold. For 2024, that threshold is $10,000 for single filers and $20,000 for married couples filing jointly. If you work in New Jersey but live elsewhere, you may owe New Jersey tax on income earned in the state. If you live in New Jersey but work in another state, you typically owe New Jersey tax on all income, though you may receive a credit for taxes paid to the other state.

Key Takeaways

  • New Jersey income tax rates range from 1.4% to 10.75% depending on your income bracket, and you only pay each rate on the portion of income that falls within that bracket.
  • You must file a New Jersey state return if you earn more than $10,000 (single) or $20,000 (married filing jointly), even if you owe no tax.
  • The state allows deductions for federal income tax paid, property taxes up to $10,000, and mortgage interest, which can lower your taxable income.
  • New Jersey offers tax credits for things like childcare expenses, earned income, and property tax relief if you meet income limits.
  • If you work out of state, you may owe tax to both New Jersey and your work state, but New Jersey allows a credit to prevent double taxation.

The tax brackets and rates for 2024

New Jersey divides income into brackets. Each bracket has its own rate, and you pay that rate only on income within that bracket. For single filers in 2024, the brackets are:

  • $0 to $20,000: 1.4%
  • $20,001 to $35,000: 1.75%
  • $35,001 to $40,000: 3.5%
  • $40,001 to $75,000: 5.525%
  • $75,001 to $110,000: 6.37%
  • $110,001 to $250,000: 8.97%
  • Over $250,000: 10.75%

Married couples filing jointly have higher income thresholds for each bracket. For example, the first bracket for married filers goes up to $40,000 at the 1.4% rate. The brackets adjust slightly each year for inflation. If your income falls across two brackets, you calculate the tax on each portion separately and add them together.

Deductions that lower your New Jersey taxable income

New Jersey allows you to subtract certain expenses from your income before calculating tax. The most common deduction is federal income tax paid — you can deduct the full amount of federal tax you paid during the year. This is unusual; most states do not allow this deduction. Property taxes are also deductible, but only up to $10,000 per year. Mortgage interest is deductible if you itemize rather than take the standard deduction.

You can choose between the standard deduction and itemizing. For 2024, the standard deduction is $12,000 for single filers and $24,000 for married couples filing jointly. If your deductible expenses (federal tax, property tax, mortgage interest, and charitable donations) add up to more than the standard deduction, itemizing saves you money. Most New Jersey residents use the standard deduction because the federal tax deduction alone often exceeds it.

Tax credits that reduce what you owe

A tax credit is different from a deduction — it reduces your tax bill dollar for dollar rather than reducing your income. New Jersey offers several credits. The Earned Income Tax Credit (EITC) is available to lower-income working people and can result in a refund even if you owe no tax. The amount depends on your income and family size. The Child and Dependent Care Credit covers up to 30% of childcare expenses, up to a maximum credit of $3,000 per dependent.

The Property Tax Reimbursement Credit is available to homeowners and renters with low to moderate income. The amount varies by income and property tax paid. Senior citizens and disabled people may may have access to for additional credits. You claim these credits on your New Jersey tax return, and the state calculates whether you may have access to based on your income and circumstances.

How to file your New Jersey state tax return

You can file online through the New Jersey Division of Taxation website using approved tax software, or you can file by mail using paper forms. The state provides free filing software for residents whose household income is below a certain threshold — typically around $79,000. If your income is above that, you can use commercial tax software or hire a tax preparer.

The important date to file is April 15 unless that date falls on a weekend or holiday. If you cannot file by the important date, you can request an extension, which gives you until October 15. An extension delays your filing important date but does not delay your payment important date — if you owe tax, you should pay by April 15 to avoid penalties and interest. If you are owed a refund, filing early ensures you receive it sooner.

Who must file and who does not

You must file a New Jersey return if your income exceeds the filing threshold and you are a New Jersey resident. The threshold is $10,000 for single filers, $20,000 for married couples filing jointly, and $15,000 for heads of household. If you earn less than the threshold, you are not required to file, but you may want to anyway if you had taxes withheld — filing allows you to claim a refund.

Non-residents who work in New Jersey must file if they earned income in the state above the threshold. If you are a part-year resident (you moved to or from New Jersey during the year), you file based on the income you earned while a resident. Military members stationed in New Jersey are generally not considered residents for tax purposes and do not owe New Jersey tax on military pay.

Out-of-state income and the credit for taxes paid elsewhere

If you live in New Jersey and work in another state, you owe New Jersey tax on all your income. However, you can claim a credit for income tax paid to the other state, which prevents you from paying tax twice on the same income. The credit is limited to the lesser of the tax you paid to the other state or the New Jersey tax on that income.

If you live outside New Jersey but work in the state, you owe New Jersey tax only on income earned in New Jersey. Your home state may also tax that income, in which case you claim a credit in your home state. The mechanics of the credit depend on your home state's rules. If you work in multiple states, each state taxes only the income earned within its borders, and you claim credits to avoid double taxation.

Frequently Asked Questions

Do I have to file a New Jersey return if I only worked part of the year?

You must file if your income for the year exceeds the threshold, even if you worked only part of the year. If you earned $12,000 as a single filer but worked only six months, you still file because your annual income is above $10,000. However, if you earned $8,000 for the full year, you do not have to file unless you want to claim a refund of withheld taxes.

Can I deduct my student loan interest on my New Jersey return?

No. New Jersey does not allow a deduction for student loan interest. You may be able to deduct it on your federal return, but that deduction does not carry over to New Jersey. However, the federal deduction reduces your federal taxable income, which is the starting point for New Jersey tax, so it has an indirect effect.

What happens if I do not file by the April 15 important date?

If you owe tax and do not file by April 15, you face a failure-to-file penalty of 5% per month (up to 25%) plus interest on the unpaid tax. If you file late but owe nothing, there is no penalty. If you are owed a refund, there is no penalty for filing late, but you should file within three years to claim the refund — after three years, unclaimed refunds go to the state.

Does New Jersey tax retirement income or Social Security?

New Jersey does not tax Social Security benefits. Retirement income from pensions and 401(k) withdrawals is taxable. However, if you are over 62 and your income is below certain thresholds, you may may have access to for the Pension and Retirement Income Exclusion, which allows you to exclude some or all of your pension and retirement account income from taxation.

What if I moved to New Jersey partway through the year?

You file as a part-year resident and owe New Jersey tax only on income earned after you moved to the state. You report income earned before the move to your previous state. You must provide documentation of your move date, such as a lease or deed. New Jersey considers you a resident starting the day you establish a permanent home in the state with the intent to remain.