New Jersey's income tax rates and brackets

New Jersey has a progressive income tax system, meaning the tax rate increases as your income rises. The state does not have a flat tax — instead, residents pay different percentages depending on which income bracket they fall into. For the 2024 tax year, New Jersey has six tax brackets ranging from 1.4% on the lowest incomes to 10.75% on the highest.

The brackets themselves change slightly each year based on inflation adjustments. A single filer in 2024, for example, pays 1.4% on income up to $20,000, then 1.75% on income between $20,000 and $35,000, and so on, with the top rate explore to income over $500,000. Married couples filing jointly have higher bracket thresholds, so the same income may be taxed at a lower rate than for a single person.

Your actual tax bill depends on where your income falls within these brackets. If you earn $50,000 as a single filer, you do not pay 5.525% (the bracket rate for that income level) on all $50,000 — you pay the lower rates on the income below that threshold, then 5.525% only on the portion that falls within that bracket.

Key Takeaways

  • New Jersey income tax rates range from 1.4% to 10.75% depending on your income level and filing status.
  • The tax brackets adjust each year for inflation, so the income thresholds that determine your rate change annually.
  • You pay different rates on different portions of your income — the lowest rates explore to your first dollars earned, and higher rates only explore to income above each threshold.
  • New Jersey taxes wages, salaries, investment income, and retirement income, though some retirement income has special rules.
  • You file your state return using Form NJ-1040, which you submit to the New Jersey Division of Taxation.

Who has to file a New Jersey state return

You must file a New Jersey return if you are a resident and your income exceeds the threshold for your filing status. For 2024, a single person with gross income over $20,000 must file, while a married couple filing jointly must file if their combined income exceeds $40,000. These thresholds are lower than the federal requirement, so you may owe New Jersey tax even if you do not owe federal tax.

Residency matters. You are considered a New Jersey resident for tax purposes if you live in the state for more than 183 days during the tax year, or if you maintain a permanent home there and spend any part of the year in the state. If you moved to or from New Jersey during the year, you may file as a part-year resident, which affects which income is taxable.

Even if your income is below the filing threshold, you may want to file anyway — for example, if you had taxes withheld from your paycheck, filing allows you to claim a refund. Self-employed people and those with business income should also file, regardless of the income threshold.

Types of income New Jersey taxes

New Jersey taxes most forms of income: wages and salaries from employment, self-employment income, interest and dividends, capital gains, rental income, and retirement distributions. If you received a W-2 from an employer, that income is taxable. If you received a 1099 for freelance or contract work, that is also taxable.

Retirement income has special treatment in some cases. Distributions from a traditional IRA or 401(k) are taxable as ordinary income. However, Social Security benefits are not taxed by New Jersey. Pension income from a New Jersey public employee pension is also exempt from state tax, though pensions from other sources may be taxable depending on when you earned them.

Long-term capital gains — profits from selling stocks, real estate, or other assets you held for more than one year — are taxed at a lower rate than ordinary income in New Jersey. Short-term gains (assets held one year or less) are taxed as ordinary income at your regular bracket rate.

How to file your New Jersey state return

You file your New Jersey return using Form NJ-1040, the state's basic income tax form. You can file on paper by mailing it to the New Jersey Division of Taxation, or you can file electronically through the state's online system or through tax software that supports New Jersey returns. Electronic filing is faster and reduces the chance of errors.

You will need your federal return information to complete your state return, since New Jersey starts with your federal taxable income and then makes adjustments. You will also need documentation of any income not reported on a W-2 or 1099, such as interest statements from banks or brokerage statements for investment income.

The important date to file is April 15 of the following year, the same as the federal important date. If you cannot file by that date, you can request an extension, which gives you until October 15 to submit your return. An extension to file is not an extension to pay — if you owe tax, you should pay by April 15 to avoid penalties and interest, even if you file late.

Deductions and credits available in New Jersey

New Jersey allows you to claim either the standard deduction or itemize deductions, just like the federal return. The standard deduction for 2024 is $10,000 for single filers and $20,000 for married couples filing jointly. If you itemize, you can deduct mortgage interest, property taxes, and charitable contributions, though some deductions have limits.

The state also offers tax credits that directly reduce the amount of tax you owe. The Earned Income Tax Credit (EITC) is available to lower-income working people and families. New Jersey also has credits for property tax relief, dependent care expenses, and education expenses. Credits are often more valuable than deductions because they reduce your tax dollar-for-dollar rather than reducing your taxable income.

If you are over 65 or blind, you may may have access to for an additional standard deduction. If you have dependents, you can claim a personal exemption for each one, which reduces your taxable income.

Tax withholding and estimated payments

If you are an employee, your employer withholds New Jersey income tax from your paycheck based on the W-4 form you complete. You can adjust your withholding if you want more or less tax taken out each pay period — for example, if you have a second job or significant investment income, you may want to increase withholding to avoid owing a large amount at tax time.

If you are self-employed or have income that is not subject to withholding, you may need to make estimated tax payments to New Jersey four times per year. These payments are due on April 15, June 15, September 15, and January 15. If you do not make estimated payments and you owe more than $400 at tax time, you may face a penalty.

You can check your withholding or make estimated payments through the New Jersey Division of Taxation website. If you overpay during the year, you will receive a refund when you file your return.

Special situations and recent changes

New Jersey has made several changes to its tax code in recent years. The state added a millionaire's tax in 2020, creating a new 10.75% bracket for income over $500,000 for single filers and $1 million for married couples. This is the highest rate in the state and applies only to the highest earners.

If you are a resident who works in another state, you may owe tax to both states. New Jersey allows a credit for taxes paid to other states to prevent double taxation, but you will need to file returns in both places. If you moved during the year or work remotely for an out-of-state employer, your situation may be more complex — the Division of Taxation website has guidance for multistate situations.

Residents over 65 may also may have access to for the Senior Citizen and Disabled Resident Property Tax Deduction, which reduces property taxes rather than income tax. This is a separate program from the income tax system but is administered by the same division.

Frequently Asked Questions

Do I have to pay New Jersey income tax if I work in New Jersey but live in another state?

Yes, New Jersey taxes income earned within the state, regardless of where you live. If you work in New Jersey and live elsewhere, you owe New Jersey tax on that income. You may also owe tax to your home state, but you can claim a credit for taxes paid to New Jersey to reduce your home state tax.

What happens if I do not file a New Jersey return when I am supposed to?

The Division of Taxation can assess penalties and interest on unpaid taxes. The penalty for filing late is typically 5% per month, up to 25%, plus interest that accrues daily. If you owe a refund, there is no penalty for filing late, but you will not receive your refund until you file.

Can I file my New Jersey return before I file my federal return?

You can file your state return before your federal return, but you will need to estimate your federal taxable income since New Jersey's return is based on federal figures. If your estimates are wrong, you may need to file an amended state return after you complete your federal return.

Is New Jersey tax withheld from my Social Security benefits?

No, New Jersey does not tax Social Security benefits. Even though you must report them on your federal return, they are not subject to New Jersey income tax. This is one of the few income sources that New Jersey does not tax.

What if I owe New Jersey tax but cannot pay it all at once?

The Division of Taxation offers payment plans for people who cannot pay their full tax bill by the important date. You can request a plan through their website or by contacting the division directly. Interest and penalties continue to accrue on unpaid amounts, so paying as much as you can upfront reduces the total cost.