State tax docs / States / New Jersey
New Jersey state income tax: engine rules, 2026
How the QuantCalc engine computes New Jersey tax for tax year 2026, rule by rule, with the official source for each rule. Verification status: Worksheet-tested (what this means).
On this page: How the tax is computed · Rate schedule · Deductions, exemptions and credits · Age 65+ subtractions and credits · Social Security · IRA, 401(k) and private pensions · Public pensions · Military retirement pay · Roth conversions · Capital gains · Blindness and disability · Part-year and nonresident returns · Worked examples · After 2026 · Not calculated ·
Verification. Machine-readable: this state's entry in the
engine config and the provenance file
(key NJ).
How the tax is computed
Every step the engine takes for New Jersey, in the order it takes them. Steps marked with a filing status or household type apply only there. Each step links the section below that carries New Jersey's figures and the official sources for it; the calculation order page describes every step for all jurisdictions.
What each filing status gets, read back from the engine for a household with $1 of income (so below every phase-out and income test):
| Single | Married filing jointly | Married filing separately | Head of household | |
|---|---|---|---|---|
| Rate schedule used | single schedule | joint schedule | single schedule | head-of-household schedule |
| Top rate | 10.75% from $1,000,000 | 10.75% from $1,000,000 | 10.75% from $1,000,000 | 10.75% from $1,000,000 |
| Standard deduction, under 65 | $1,000 | $2,000 | $1,000 | $1,000 |
| Standard deduction at 70 (joint: both 70) | $1,000 | $2,000 | $1,000 | $1,000 |
| Personal exemption | none | none | none | none |
| Age subtractions at 70 (joint: both 70) | $1,001 | $2,001 | $1,001 | $1,001 |
- Per-person mode joint returns with the spouse's age given On a joint return with the spouse's age given, every age test the state applies per taxpayer is evaluated for each spouse at their own age. Without it one household age applies to both.
engine step (compute_state_tax_detail). Engine convention, no external source: The engine cannot know the second spouse's age unless told. - Blindness and disability, per person only when the caller says a person is blind or disabled The filer is person one; the spouse counts only on a joint return and only when the caller says so (there is no household convention as for age). Where a state lets a disabled person (and, where it says so, a blind one, or one whose spouse is disabled) qualify for its general retirement exclusion before the age, that person is treated as having reached the age for that exclusion only. Of the 42 taxing jurisdictions, these have a blind amount: Arizona, Arkansas, California, Colorado, Delaware, the District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, North Dakota, Oklahoma, Oregon, Utah, Vermont and Virginia; these have none: Alabama, Connecticut, Georgia, Louisiana, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, West Virginia and Wisconsin. A disability route is calculated in Arkansas, the District of Columbia, Georgia, Hawaii, Idaho, Iowa, Maryland, Michigan, New Jersey, Oregon and West Virginia.
engine step (compute_state_tax_detail). Engine convention, no external source: Who is blind or disabled is the caller's statement; the engine has no household convention for it. - Rate schedule and standard deduction by filing status Single uses the single schedule and deduction; married filing jointly the joint ones. Head of household and married filing separately follow the two steps below.
New Jersey's values · engine step (select_brackets). Sources (Rate schedule): 2025 Form NJ-1040 Instructions (Tax Rate Schedules, p.63) (checked 2026-10-12) - Married filing separately Where the state publishes its own separate schedule, that one (with half the joint deduction unless a separate deduction is set). Where one schedule applies to every status, that schedule unscaled with the single deduction. Otherwise the joint schedule with every threshold and the deduction halved (computed as the joint tax on twice the income, halved).
New Jersey's values · engine step (select_brackets). Sources (Rate schedule): 2025 Form NJ-1040 Instructions (Tax Rate Schedules, p.63) (checked 2026-10-12) - Head of household The state's head-of-household schedule where it has one, else the single schedule; the head-of-household deduction where set, else the single deduction.
New Jersey's values · engine step (select_brackets). Sources (Rate schedule): 2025 Form NJ-1040 Instructions (Tax Rate Schedules, p.63) (checked 2026-10-12) - The income total every income test uses Other ordinary income + retirement distributions (before any exclusion) + conversion + federally taxable Social Security + long-term gains + Railroad Retirement Tier 2. It stands in for federal adjusted gross income in every threshold, cliff and phase-out below; state subtractions do not reduce it.
engine step (compute_state_tax_detail). Engine convention, no external source: The inputs are the federal AGI components, so their sum is federal AGI for these income types. - Attributing income to each spouse joint returns with each spouse's own amounts given With a caller's split (the API's
spouseobject), each spouse's own distributions (employer-plan money included), pension, public pension, conversion, wages and military pay; spouse 2's shares are clamped into the household totals and spouse 1 gets the rest. Without a split, in per-person mode, every item is divided 50/50. Social Security is divided by each spouse's own gross benefits where the caller givesspouse.socialSecurityGross, else 50/50; other ordinary income and gains are always divided 50/50 where a rule needs a per-person amount. The split is used only where a state's rule is per taxpayer; household totals stay authoritative for the base and the income tests.
engine step (compute_state_tax_detail). Engine convention, no external source: Equal attribution is the neutral split when the owner of a dollar is not known. - Disability pay only when the caller gives the person facts (a civil service annuity, disability pay, Social Security disability, survivor benefits, an IRA basis or an exception) Each person's disability pay (the caller's
disabilityIncome, part of the pension income) is excluded up to the state's cap (all of it where there is none), for a totally and permanently disabled person where the state requires it and below the age where there is one; on a joint return without per-person amounts the cap is doubled only when a second person can qualify (the spouse also said to be disabled where the state requires it). Where the state reduces it, the total is reduced dollar for dollar by the return's income over the threshold (one threshold per return; the separate-return threshold where there is one). The excluded dollars leave the base before any retirement exclusion. Where the state reads it, the plan's minimum retirement age (when given) replaces the age at which the pay stops being excluded.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Blindness and disability): 2025 NJ-1040 instructions (checked 2026-10-12) - Keeping the per-spouse shares inside the household joint returns with each spouse's own amounts given After the public-pension and employer-pension carve-outs, if the two spouses' remaining shares add up to more than the household's exclusion-eligible distributions (an inconsistent split), spouse 1's share is reduced so they do not.
engine step (compute_state_tax_detail). Engine convention, no external source: Input normalisation. - Military retirement pay The state's military rule runs first, on military pay alone, per taxpayer: each spouse's own pay at their own age when attributed, otherwise half each at the household age on a joint return. Exempt dollars leave the base; the rest become pension dollars for the general retirement rules. Where the state lets a disabled retiree qualify at any age, a disabled person is treated as having reached the rule's age.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Military retirement pay): Njit6.shtml (checked 2026-10-12); 2025 NJ-1040 instructions (checked 2026-10-12) - One taxpayer's military exemption Exempt: all of it (below the age split, up to the younger cap). Capped: up to the cap for the age tier, plus the earned-income bonus below the age split when the taxpayer's own wages exceed the threshold, less the taxpayer's own Social Security where the rule says so. Percentage: the percentage (below the age split, up to the younger cap). Then the income limit: above it the exemption is lost, or phased out over the range where one is set.
New Jersey's values · engine step (military_exempt_one). Sources (Military retirement pay): Njit6.shtml (checked 2026-10-12); 2025 NJ-1040 instructions (checked 2026-10-12) - Income tests without exempt pay Where the state's return does not report exempt income, the income that sets the retirement-exclusion bands and tests (New Jersey's line 27) leaves out the military pay the state exempts and the disability pay it excludes; the federal-AGI-like total the other tests use keeps them.
New Jersey's values · engine step (compute_state_tax_detail). Sources (IRA, 401(k) and private pensions): Retirement Income Exclusions (checked 2026-10-12); 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion) (checked 2026-10-12) - Social Security exempt None of the federally taxable benefit enters the base.
New Jersey's values · engine step (ss_amount_in_state_base). Sources (Social Security): 2025 Form NJ-1040 Instructions (checked 2026-10-12) - Does a conversion draw the retirement cap? Where the state lets a conversion draw the capped exclusion, and the filer is at or above the conversion age (the state's own pooling age where it has one; any age for a disabled person where the state says so), the conversion is pooled with distributions against the cap. A spouse who elects not to claim the exclusion draws none of it.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Roth conversions): 2025 Form NJ-1040 Instructions (Line 20a) (checked 2026-10-12); Tax Topic Bulletin GIT-2, IRA Withdrawals (checked 2026-10-12) - Retirement exclusion per spouse (both ages known) joint returns with the spouse's age given Full-exclusion states exclude each qualifying spouse's own dollars. Capped states give each spouse the single cap for their own age against their own eligible dollars (pension dollars only where the exclusion is pension-only; employer dollars only below the IRA age), less their military exclusion and their own Social Security offset (by the spouse's stated gross benefits, else half). Per-return states (and the pooled-if-both-qualify rule when both qualify) apply the joint cap to the couple's pooled eligible dollars when either spouse qualifies. The income tests then apply once to the summed deduction.
New Jersey's values · engine step (compute_state_tax_detail). Sources (IRA, 401(k) and private pensions): Retirement Income Exclusions (checked 2026-10-12); 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion) (checked 2026-10-12) - Conversion pooled with distributions The conversion joins the distributions against the one cap (with a spouse split in a per-taxpayer state, each spouse's own distributions and conversion against that spouse's cap). Nothing of the conversion is added separately.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Roth conversions): 2025 Form NJ-1040 Instructions (Line 20a) (checked 2026-10-12); Tax Topic Bulletin GIT-2, IRA Withdrawals (checked 2026-10-12) - Retirement exclusion (household) The distributions eligible for the exclusion go through the exclusion below. Taxable public-pension dollars left by a cap are not eligible; below the IRA age only employer-plan dollars are.
New Jersey's values · engine step (compute_state_tax_detail). Sources (IRA, 401(k) and private pensions): Retirement Income Exclusions (checked 2026-10-12); 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion) (checked 2026-10-12) - Conversion taxed or exempt In full-exclusion states a conversion is exempt at the qualifying age (at any age where the state says so). Elsewhere, unless pooled above, it is ordinary income taxed in full.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Roth conversions): 2025 Form NJ-1040 Instructions (Line 20a) (checked 2026-10-12); Tax Topic Bulletin GIT-2, IRA Withdrawals (checked 2026-10-12) - Graduated exclusion by income band Below the exclusion age nothing is excluded. Otherwise the share of the exclusion granted falls with income (Social Security left out); in the middle bands it is a percentage by filing status of the whole pension, limited to the pension, where the state's worksheet says so, otherwise of the capped amount. The separate-return cap applies where set. Engine values, single and head of household: 100% from $0; 37.5% over $100,000; 18.75% over $125,000; 0% over $150,000; joint: 100% from $0; 50% over $100,000; 25% over $125,000; 0% over $150,000; separate: 100% from $0; 25% over $100,000; 12.5% over $125,000; 0% over $150,000.
New Jersey's values · engine step (retirement_distributions_in_state_base). Sources (IRA, 401(k) and private pensions): Retirement Income Exclusions (checked 2026-10-12); 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion) (checked 2026-10-12) - Cap by age tier The full cap at or above the exclusion age, the lower cap at or above the partial age, otherwise none. Joint returns use the joint cap; every other status the single cap.
New Jersey's values · engine step (retirement_distributions_in_state_base). Sources (IRA, 401(k) and private pensions): Retirement Income Exclusions (checked 2026-10-12); 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion) (checked 2026-10-12) - The capped deduction Deduction = the smaller of the eligible distributions and the cap, then reduced by the income limit above; the rest of the distributions stays in the base.
New Jersey's values · engine step (retirement_distributions_in_state_base). Sources (IRA, 401(k) and private pensions): Retirement Income Exclusions (checked 2026-10-12); 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion) (checked 2026-10-12) - One taxpayer's cap joint returns with the spouse's age given For per-spouse calculations, each spouse's cap is the single-column cap for their age tier.
New Jersey's values · engine step (per_taxpayer_cap_single). Sources (IRA, 401(k) and private pensions): Retirement Income Exclusions (checked 2026-10-12); 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion) (checked 2026-10-12) - Long-term gains in the base Where gains are taxed as ordinary income: net long-term gain less the flat exclusion (never below zero), times the inclusion share. Elsewhere none enters.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Capital gains): 2025 Form NJ-1040 Instructions (Schedule NJ-DOP) (checked 2026-10-12); NJ-1040 Instructions (checked 2026-10-12) - Exemption for blindness only when the caller says a person is blind or disabled An extra exemption for each blind person (the filer, and the spouse on a joint return). Where the state's exemption is for a person who is blind or disabled, a disabled person below the state's age limit (if any) qualifies too, one exemption per person either way.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Blindness and disability): 2025 NJ-1040 instructions (checked 2026-10-12) - Veteran exemption An exemption for each veteran. The inputs name a veteran only through military retired pay: each person with their own military pay (at least a cent, compared in cents: the primary's own pay is the household total less the spouse's, and its binary rounding residue is not a shortfall) who is not receiving it as a survivor (without a spouse object, the household's pay counts one person).
New Jersey's values · engine step (compute_state_tax_detail). Sources (Military retirement pay): Njit6.shtml (checked 2026-10-12); 2025 NJ-1040 instructions (checked 2026-10-12) - Dependent exemptions and deductions only when the caller lists dependents An amount per dependent subtracted like the personal exemption: the state's flat amount, or the stepped per-exemption amount the filer gets, or the state's own income steps; nothing above an income limit where there is one; a percentage phase-out per income step where there is one; one more for a dependent in an age band or a student up to an age, for a dependent born in the year, and for a disabled dependent; a deduction per dependent beyond the first on joint and head-of-household returns; and a child deduction by an income table for dependents under an age. A head of household's status exemption that already holds one dependent's amount counts one fewer. Where the state says so, the phase-out is measured on the state AGI (the base before deductions).
New Jersey's values · engine step (compute_state_tax_detail). Sources (Deductions, exemptions and credits): 2025 Form NJ-1040 Instructions (checked 2026-10-12) - Age subtraction At or above the age: the single amount, or the joint amount on a joint return (both spouses at the household age). In per-person mode, half the joint amount (or the single amount) per qualifying spouse. Plus the low-income amount below the income test; less the military exclusion where the statute says so; limited to the spouse's own income where the statute says so. Where the statute counts income from any source, the taxable remainder of the spouse's own public pension is part of that own income. Where the state says so, the Social Security that offsets a person's amount is that person's own.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Age 65+ subtractions and credits): 1040i (checked 2026-10-12) - Other retirement income exclusion A household with a filer (a spouse on a joint return) at the age, total income (Tier 2 railroad benefits left out) at most the limit and wages at most the limit excludes other income up to the part of the pension-exclusion maximum (the dollar maximum, or in the higher bands the band percentage of total income) the pension exclusion, conversions included, did not use; on a joint return with one spouse at the age, only that spouse's income (own wages, half the household items, and the spouse's own distributions and conversion left after their own exclusion). Age only: disability does not qualify.
New Jersey's values · engine step (compute_state_tax_detail). Sources (IRA, 401(k) and private pensions): Retirement Income Exclusions (checked 2026-10-12); 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion) (checked 2026-10-12) - State taxable income Other ordinary income + Social Security, retirement income, conversion and gains left in the base − standard deduction − personal exemption − age subtractions.
engine step (compute_state_tax_detail). Engine convention, no external source: The order of subtraction follows the state forms; each amount is sourced at its own step. - No tax at or below zero State taxable income at or below zero returns a tax of 0 (credits are not refundable), unless the state has a tax computed apart from taxable income that still applies (next step).
engine step (compute_state_tax_detail). Engine convention, no external source: Every credit the engine carries is nonrefundable, so nothing below can make a zero tax negative; each credit is sourced at its own step. - Separate-return scaling married filing separately For the halved-joint rule, taxable income is doubled before the schedule and the result halved.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Rate schedule): 2025 Form NJ-1040 Instructions (Tax Rate Schedules, p.63) (checked 2026-10-12) - The rate schedule Each bracket's rate on the part of taxable income inside it, summed. No rounding: the result is carried in full precision.
New Jersey's values · engine step (apply_state_brackets). Sources (Rate schedule): 2025 Form NJ-1040 Instructions (Tax Rate Schedules, p.63) (checked 2026-10-12) - Credits cannot make the tax negative The credits are subtracted and the result floored at zero.
engine step (compute_state_tax_detail). Engine convention, no external source: Every credit the engine carries is nonrefundable; each credit is sourced at its own step. - No tax at or below the filing threshold Where the state imposes no tax on a filer whose gross income (New Jersey line 29: total income less the pension and other-retirement exclusions) is at or below the filing threshold, the tax after credits is zero at or below the status's amount (single and married filing separately; joint and head of household). One cent above it the whole tax is due.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Deductions, exemptions and credits): 2025 Form NJ-1040 Instructions (checked 2026-10-12) - Qualifying surviving spouse qualifying surviving spouse returns A qualifying surviving spouse (
filingStatusqss) is one person on the return, taxed from the single figures with the state's own treatment of the status laid over them: where the state says so, the joint rate schedule, the joint standard deduction, the joint personal exemption, the joint income limits and phase-outs (only those the state sets for joint returns), the married 65+ and blindness amounts, or the head-of-household return; where the state gives the status nothing of its own, the single return. The federal figures the engine derives for the status are the federal qualifying-surviving-spouse ones (the joint standard deduction, the married 65+ amount).
New Jersey's values · engine step (state_tax_effective_config). Sources (Rate schedule): 2025 Form NJ-1040 Instructions (Tax Rate Schedules, p.63) (checked 2026-10-12) - Railroad Retirement benefits only when the caller gives Railroad Retirement benefits Railroad Retirement benefits are never taxed by a state (45 U.S.C. §231m). Tier 2 (
railroadRetirementTier2) is in the income total the tests use but never in the base. Tier 1 (railroadRetirementTier1) is a part of the gross benefits (socialSecurityGross); its share of the taxable benefits is taken out of the Social Security every state rule sees, so a state that taxes Social Security never reaches it. Where a state's worksheet says so, the benefits reduce a retirement cap or subtraction (ID, IN, MD, ME, MN: both tiers; MI: the taxable railroad benefits); Minnesota's and Utah's Social Security rules test an income without them, Minnesota's, New Jersey's and California's retirement income tests an income without Tier 2; Ohio and Delaware test their own AGI everywhere, which never holds the benefits.
New Jersey's values · engine step (compute_state_tax_detail). Sources (Social Security): 2025 Form NJ-1040 Instructions (checked 2026-10-12) - Each spouse's own Social Security joint returns On a joint return, each spouse's own Social Security is the spouse's share of the benefits by
spouse.socialSecurityGrosswhen the caller gives it (Tier 1 railroad benefits left out), else half each. It is what the per-spouse rules read: Colorado's per-spouse subtraction, Rhode Island's per-spouse modification, and the Maine, Maryland and other retirement caps reduced by the benefits each spouse received (with each spouse's own railroad benefits where the state counts them).
New Jersey's values · engine step (compute_state_tax_detail). Sources (Social Security): 2025 Form NJ-1040 Instructions (checked 2026-10-12) - Property tax deduction (NJ) NJ-1040 lines 40a-41: the property taxes paid (or the rent share), at most the cap ($15,000; half on a separate return), off taxable income.
New Jersey's values · engine step (st_compute). Sources (Deductions, exemptions and credits): 2025 Form NJ-1040 Instructions (checked 2026-10-12) - Medical expense deduction (NJ) and exemption (NM) NJ: the medical expenses over a share of New Jersey gross income (line 29); NM: $3,000 when the filer or spouse is 65 or older and the medical care expenses are at least $28,000 (not on a separate return); off income.
New Jersey's values · engine step (st_compute). Sources (Deductions, exemptions and credits): 2025 Form NJ-1040 Instructions (checked 2026-10-12) - Property tax deduction or credit (NJ) Worksheet H: the deduction when it lowers the tax by at least the credit ($50; half on a separate return), otherwise the refundable credit (at or below the filing threshold only at 65 or older, blind or disabled).
New Jersey's values · engine step (compute_state_tax_detail). Sources (Deductions, exemptions and credits): 2025 Form NJ-1040 Instructions (checked 2026-10-12) - Refundable state credits The credits paid beyond the tax (reported in refundableCredits; netTax = totalTax less them): earned income credits as a share of the federal EIC with each state's own age band (OK on the 2020 federal credit, DC's own childless schedule, the CalEITC table, MN's Working Family Credit), the NYC EIC and school tax credits, and the property-tax, renter, grocery and senior credits of MA, MI, NJ, ID, HI, NM, OK, AZ, NY, RI, WV, ME, DC, MN, MO, WI, IN and MT, each on its own income measure. Engine 1.13.1: a part-year NYC resident's school tax credits (the Table 2 proration chart and the rate-reduction amount on IT-360.1 line 47; IT-203 lines 60 / 60a for a part-year state resident).
New Jersey's values · engine step (state_tax_refundable_credits). Sources (Deductions, exemptions and credits): 2025 Form NJ-1040 Instructions (checked 2026-10-12)
Rate schedule
Single
| Taxable income from | to | Rate |
|---|---|---|
| $0 | $20,000 | 1.4% |
| $20,000 | $35,000 | 1.75% |
| $35,000 | $40,000 | 3.5% |
| $40,000 | $75,000 | 5.525% |
| $75,000 | $500,000 | 6.37% |
| $500,000 | $1,000,000 | 8.97% |
| $1,000,000 | and up | 10.75% |
Married filing jointly
| Taxable income from | to | Rate |
|---|---|---|
| $0 | $20,000 | 1.4% |
| $20,000 | $50,000 | 1.75% |
| $50,000 | $70,000 | 2.45% |
| $70,000 | $80,000 | 3.5% |
| $80,000 | $150,000 | 5.525% |
| $150,000 | $500,000 | 6.37% |
| $500,000 | $1,000,000 | 8.97% |
| $1,000,000 | and up | 10.75% |
Head of household
| Taxable income from | to | Rate |
|---|---|---|
| $0 | $20,000 | 1.4% |
| $20,000 | $50,000 | 1.75% |
| $50,000 | $70,000 | 2.45% |
| $70,000 | $80,000 | 3.5% |
| $80,000 | $150,000 | 5.525% |
| $150,000 | $500,000 | 6.37% |
| $500,000 | $1,000,000 | 8.97% |
| $1,000,000 | and up | 10.75% |
Married filing separately: one schedule applies to every filing status, so the engine uses it unscaled with the single deduction.
Source review notes (what the sources do not state outright, or what the engine does not carry):
- No 2026 NJ-1040 rate schedule is published yet; the 2025 schedule is used (rates are statutory, unindexed). N.J.S.A. 54A:2-1 could not be fetched (NJ Legislature hosts unreachable from the checking host).
- 2025 Form NJ-1040 Instructions (Tax Rate Schedules, p.63), New Jersey Division of Taxation. New Jersey taxes single and married-filing-separately filers on Table A (1.4% to 10.75%, edges $20,000/$35,000/$40,000/$75,000/$500,000/$1,000,000) and joint, head-of-household and qualifying-widow(er) filers on Table B (1.4% to 10.75%, edges $20,000/$50,000/$70,000/$80,000/$150,000/$500,000/$1,000,000). Checked 2026-10-12.
Deductions, exemptions and credits
- Standard deduction (or the exemption the engine carries in its place): $1,000 single, $2,000 married filing jointly, and the single amount for head of household.
- 2025 Form NJ-1040 Instructions, New Jersey Division of Taxation. New Jersey has no standard deduction; each filer (and a joint-filing spouse) claims a $1,000 regular exemption, which the engine carries as a $1,000/$2,000 deduction. Engine 1.7.0: NJ-1040 lines 10-12: $1,500 per dependent, and $1,000 more per dependent full-time student under 22. Line 28b (Worksheet D): a 62+ household (joint: the 62+ spouse's income) with wages and business income at most $3,000 and total income at most $150,000 excludes other income up to the unused pension exclusion. Engine 1.8.0: no tax when New Jersey gross income (line 29: total income less the line 28a and 28b exclusions) is at or below the filing threshold, $10,000 single or married filing separately and $20,000 joint or head of household; such a filer files only to get the withholding back. Earned income credit (engine 1.12.0, refundableCredits): 40% of the federal EIC, a childless filer from 18 with no upper age. Property tax deduction or credit (engine 1.12.0): property tax or 18% of rent, at most $15,000, deducted when it saves at least the $50 credit; otherwise the $50 refundable credit. Medical expense deduction (engine 1.12.0): unreimbursed medical expenses over 2% of New Jersey gross income (line 29). Checked 2026-10-12.
Age 65+ subtractions and credits
- At age 65 or older: $1,000 is subtracted from the base ($2,000 for a married couple filing jointly when both qualify), against any income. With the spouse's age given, each spouse qualifies on their own age.
- 1040i, New Jersey Division of Taxation. New Jersey Division of Taxation: "Line 7 - Senior 65+ You can claim a $1,000 exemption if you were 65 or older on the last day of the tax year" (and 1 more quoted passage) Checked 2026-10-12.
IRA, 401(k) and private pensions
- Pension, annuity and IRA/401(k) distributions: up to $75,000 excluded per taxpayer ($100,000 on a joint return) at age 62 or older.
- Above the first band the exclusion is a percentage of the whole pension (limited to the eligible amount), and the percentage falls with income (Social Security excluded from the income test): single and head of household 100% from $0; 37.5% over $100,000; 18.75% over $125,000; 0% over $150,000; married filing jointly 100% from $0; 50% over $100,000; 25% over $125,000; 0% over $150,000; married filing separately 100% from $0; 25% over $100,000; 12.5% over $125,000; 0% over $150,000.
- Married filing separately: the cap is $50,000.
- Joint returns: the cap is per return. With both ages given, the age test is met when either spouse qualifies and the $100,000 joint cap covers the couple's pooled income.
Source review notes (what the sources do not state outright, or what the engine does not carry):
- The percentage bands (100%/50%/37.5%/25%/18.75%/12.5%) are hardcoded in state_tax.c, not config fields; they are covered by phrase claims.
- P.L.2021, c.129 (engine citation) could not be fetched: pub.njleg.gov is unreachable from the checking host.
- Retirement Income Exclusions, New Jersey Division of Taxation. Filers 62+ (or disabled) with total income up to $150,000 may exclude pension, annuity and IRA income: up to $100,000 joint, $75,000 single/HOH or $50,000 separate at income up to $100,000, and a percentage of taxable pension (50%/37.5%/25% at $100,001-$125,000; 25%/18.75%/12.5% at $125,001-$150,000) above that. Checked 2026-10-12.
- 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion), New Jersey Division of Taxation. Line 28a is the lesser of taxable pension (line 20a) and a filing-status amount: $100,000/$75,000/$50,000 when line 27 income is up to $100,000, else 50%/37.5%/25% or 25%/18.75%/12.5% of line 20a up to $150,000; the income test uses line 27 total income, which excludes Social Security. Engine 1.7.0: NJ-1040 lines 10-12: $1,500 per dependent, and $1,000 more per dependent full-time student under 22. Line 28b (Worksheet D): a 62+ household (joint: the 62+ spouse's income) with wages and business income at most $3,000 and total income at most $150,000 excludes other income up to the unused pension exclusion. Checked 2026-10-12.
Public pensions
No separate treatment: public pensions follow the rules for other retirement income above.
- 2025 Form NJ-1040 Instructions (Line 20a), New Jersey Division of Taxation. Federal, state, local government and teachers' pensions are taxable pension income on line 20a and share the same capped pension exclusion as private pensions; U.S. military pensions are exempt. Checked 2026-10-12.
Military retirement pay
- Military retirement pay is fully exempt, at any age.
- Rules are applied per taxpayer at that person's own age when the spouse's age is given. API value:
rules.militaryRetirement.treatment: "exempt".
- Njit6.shtml, New Jersey Division of Taxation. Military pensions and survivor benefit payments are exempt, at any age. Checked 2026-10-12.
- 2025 NJ-1040 instructions, New Jersey Division of Taxation. Engine 1.8.0: line 9 gives a $6,000 exemption to each veteran honorably released from active duty (a joint-filing spouse too); the engine counts a person with their own military retired pay who is not receiving it as a survivor. Military pensions are not reported on the return, so they are left out of line 27, the income the pension-exclusion bands and Worksheet D test. Checked 2026-10-12.
Roth conversions
A conversion draws the retirement-income exclusion together with distributions from age 62; the part above the cap is taxed as ordinary income.
Source review notes (what the sources do not state outright, or what the engine does not carry):
- The engine treats the whole federally taxable conversion as NJ income; NJ excludes previously taxed IRA contributions (NJ never allowed a deduction for them), which the engine does not track.
- 2025 Form NJ-1040 Instructions (Line 20a), New Jersey Division of Taxation. The taxable part of a traditional-to-Roth IRA conversion is reported on line 20a with other pension/IRA income, so at 62+ it shares the Line 28a pension exclusion. Checked 2026-10-12.
- Tax Topic Bulletin GIT-2, IRA Withdrawals, New Jersey Division of Taxation. When a traditional IRA is converted to a Roth IRA, only amounts not previously taxed by New Jersey (earnings and pre-tax rollovers such as 401(k) money) are New Jersey income in the conversion year. Checked 2026-10-12.
Capital gains
- Net long-term gain is taxed as ordinary income.
- Short-term gains are ordinary income.
- 2025 Form NJ-1040 Instructions (Schedule NJ-DOP), New Jersey Division of Taxation. Capital gains are reported on Schedule NJ-DOP as net gains from disposition of property and taxed at the regular NJ rates; there is no separate long-term rate or exclusion. Checked 2026-10-12.
- NJ-1040 Instructions, New Jersey Division of Taxation. New Jersey allows no net loss in one income category against another category and no carryover (engine 1.9.0: no deduction). Checked 2026-10-12.
Blindness and disability
- An extra exemption of $1,000 for each person who is blind, or who is disabled (the filer, and the spouse on a joint return), one per person.
- The retirement income exclusion's age test is met by a disabled person or a blind one: the engine treats them as 62 for that exclusion only.
- The API applies these through its
blind,disabled,spouse.blindandspouse.disabledfields; absent means false.
- 2025 NJ-1040 instructions, New Jersey Division of Taxation. A $1,000 exemption per person who is blind or disabled (one per person); the pension exclusion goes to a taxpayer 62 or older, or blind or disabled under Social Security guidelines. Engine 1.8.0: a public or private disability pension is not New Jersey income until the year the person turns 65 (then it is pension income), and it is left out of line 27. Checked 2026-10-12.
Part-year and nonresident returns
- Part-year resident (NJ-1040 (part-year)): the tax on the state's own income (what was received while a resident, plus the state-source income while a nonresident), with the deductions and exemptions the form prorates scaled by its ratio (prorated by months).
- Nonresident (NJ-1040NR): the tax a full-year resident would owe on all the year's income, times the state's income ratio.
- The ratio: the state's own AGI (after its subtractions) of the state's income over the state AGI of the whole year, rounded to 4 places, which may exceed 1.
- Prorated on a part-year return: the standard deduction, the personal exemptions, the age-65 subtraction or exemption, the retirement exclusion caps, dependent exemptions.
- Part-year (NJ-1040): exemptions, deductions and (whole-year income $100,000 or less) the pension exclusion × months resident / 12, 15 days or more counting as a month; the filing threshold tested on the whole year's income. Nonresident (NJ-1040NR): the tax × the ratio, which may exceed 100%.
- A nonresident's retirement income is not taxable by the state (4 U.S.C. §114); the API refuses it in
residency.stateIncome. The credit for tax paid to another state and the earned income credits on these returns are not computed.
Married couples whose residency differs (engine 1.13.0)
With residency.spouse on a joint request, each allowed treatment is calculated and reported in residency.couple; tax is the required one, else the state's default, else the couple's residency.election, else the joint return the request's mfj names. Each rule is quoted from the state's instructions (engine 1.14.0: and its statutes, regulations, bulletins and other official guidance) in the sources below.
| Spouses | New Jersey's rule |
|---|---|
| One spouse a full-year resident, the other a part-year resident | a joint part-year / nonresident return is required; the joint return is not calculated: New Jersey requires the joint return, and no Division document says how the joint part-year NJ-1040 (one residency period) combines a full-year resident's income with a part-year spouse's or prorates the exemptions. |
| One spouse a full-year resident, the other a nonresident | the couple's choice: separate returns or a joint resident return (both taxed as full-year residents). |
| One spouse a part-year resident, the other a nonresident | the couple's choice: separate returns or a joint resident return (both taxed as full-year residents). |
| Both part-year residents, different resident periods | a joint part-year / nonresident return is required; the joint return is not calculated: New Jersey requires the joint return, and no Division document says how the joint part-year NJ-1040 (one residency period) handles two different residency periods. |
| Both nonresidents, only one with income from the state | a joint part-year / nonresident return, unless the couple elects separate returns. |
- 2025 Form NJ-1040 Resident Return Instructions, New Jersey Division of Taxation. Part-year / nonresident return (engine 1.12.0, residency): Part-year: no part-year return. NJ-1040 reports only income received while a resident, taxed at resident rates (D-like: resident-period income only), with exemptions, deductions, credits and the pension/retirement exclusions prorated by MONTHS of residency (15+ days = a month). Nonresident period (and full-year nonresidents): NJ-1040NR = method R - tax on all income (column A, worldwide income as if resident; for part-year nonresidents only the income received while a nonresident) x income percentage (column B NJ-source / column A), wi Checked 2026-10-12.
- 2025 Form NJ-1040NR Nonresident Return Instructions, New Jersey Division of Taxation. Part-year / nonresident return (engine 1.12.0, residency): Part-year: no part-year return. NJ-1040 reports only income received while a resident, taxed at resident rates (D-like: resident-period income only), with exemptions, deductions, credits and the pension/retirement exclusions prorated by MONTHS of residency (15+ days = a month). Nonresident period (and full-year nonresidents): NJ-1040NR = method R - tax on all income (column A, worldwide income as if resident; for part-year nonresidents only the income received while a nonresident) x income percentage (column B NJ-source / column A), wi Checked 2026-10-12.
- New Jersey Resident Return NJ-1040NR Instructions (2025), New Jersey Division of Taxation. Married couples whose residency differs (engine 1.13.0): Checked 2026-10-06.
- 2025 Form NJ-1040 Instructions, NJ Division of Taxation. Married couples whose residency differs (engine 1.13.0): Checked 2026-10-12.
- GIT-4 Filing Status (January 2026), NJ Division of Taxation. Married couples whose residency differs (engine 1.13.0): Checked 2026-10-12.
- GIT-6 Part-Year Residents and Nonresidents (May 2026; forms/amounts for Tax Year 2025), NJ Division of Taxation. Married couples whose residency differs (engine 1.13.0): Checked 2026-10-12.
Worked examples
Computed by the engine for the fixed households below (the same ones for every state, so states compare directly). Federal tax is not supplied, so a federal-tax deduction is not taken; the income tests use the sum of the components as income.
| Household (engine inputs) | State tax |
|---|---|
| Single, 67: $30,000 private pension, $20,000 IRA, $10,000 interest, $24,000 Social Security ($17,000 federally taxable), $5,000 long-term gain | $0 |
| Married filing jointly, 70: $40,000 public pension, $40,000 IRA, $20,000 interest, $40,000 Social Security ($34,000 federally taxable), $10,000 long-term gain | $829.50 |
| Single, 60: $60,000 other ordinary income and a $50,000 Roth conversion | $4,817.05 |
| Married filing jointly, 66: $30,000 IRA, a $40,000 Roth conversion, $30,000 Social Security ($25,500 federally taxable) | $0 |
| Single, 58: $36,000 military retirement pay and $30,000 wages | $332.50 |
| Married filing jointly, ages 67 and 61: $50,000 IRA, $10,000 interest, $30,000 Social Security ($25,500 federally taxable), each spouse's age given | $402.50 |
Line by line
The intermediate lines the engine records while it computes each example (its detail record, printed as it comes out; lines that are zero are left out). The engine's documentation build checks that the lines add up to the taxable income and the tax, for every state, filing status and a grid of households. Each line links the engine step that produces it.
Single, 67: $30,000 private pension, $20,000 IRA, $10,000 interest, $24,000 Social Security ($17,000 federally taxable), $5,000 long-term gain: $0
Married filing jointly, 70: $40,000 public pension, $40,000 IRA, $20,000 interest, $40,000 Social Security ($34,000 federally taxable), $10,000 long-term gain: $829.50
| Line | Amount |
|---|---|
| Income total used by the income tests | $144,000 |
| Retirement income and conversions excluded (not in the base) | $40,000 |
| + Other ordinary income in the base | $20,000 |
| + Retirement income in the base | $40,000 |
| + Long-term gain in the base | $10,000 |
| − Standard deduction | $2,000 |
| − Age subtractions and deductions | $17,000 |
| = State taxable income | $51,000 |
| Tax from the rate schedule | $829.50 |
| = Tax before credits | $829.50 |
| = Tax | $829.50 |
Single, 60: $60,000 other ordinary income and a $50,000 Roth conversion: $4,817.05
| Line | Amount |
|---|---|
| Income total used by the income tests | $110,000 |
| + Other ordinary income in the base | $60,000 |
| + Roth conversion in the base | $50,000 |
| − Standard deduction | $1,000 |
| = State taxable income | $109,000 |
| Tax from the rate schedule | $4,817.05 |
| = Tax before credits | $4,817.05 |
| = Tax | $4,817.05 |
Married filing jointly, 66: $30,000 IRA, a $40,000 Roth conversion, $30,000 Social Security ($25,500 federally taxable): $0
Single, 58: $36,000 military retirement pay and $30,000 wages: $332.50
| Line | Amount |
|---|---|
| Income total used by the income tests | $66,000 |
| Military pay excluded (not in the base) | $36,000 |
| + Other ordinary income in the base | $30,000 |
| − Standard deduction | $1,000 |
| − Personal exemption | $6,000 |
| = State taxable income | $23,000 |
| Tax from the rate schedule | $332.50 |
| = Tax before credits | $332.50 |
| = Tax | $332.50 |
Married filing jointly, ages 67 and 61: $50,000 IRA, $10,000 interest, $30,000 Social Security ($25,500 federally taxable), each spouse's age given: $402.50
| Line | Amount |
|---|---|
| Income total used by the income tests | $85,500 |
| Retirement income and conversions excluded (not in the base) | $25,000 |
| + Other ordinary income in the base | $10,000 |
| + Retirement income in the base | $25,000 |
| − Standard deduction | $2,000 |
| − Age subtractions and deductions | $6,000 |
| = State taxable income | $27,000 |
| Tax from the rate schedule | $402.50 |
| = Tax before credits | $402.50 |
| = Tax | $402.50 |
After 2026: how the amounts move
A request with projection (API) estimates a later tax year from these rules: every
dollar amount and age test below moves the way New Jersey's law moves it. Rates and the rules themselves stay the 2026 ones
(how projection works).
| Amounts (engine fields) | After 2026 | What the law says, and the source |
|---|---|---|
brackets_single (the single rate schedule's thresholds), brackets_mfj (the mfj rate schedule's thresholds), brackets_hoh (the hoh rate schedule's thresholds) | Fixed in law: held at the rules-year amount in every later year. | N.J.S.54A:2-1 as amended by P.L.2020, c.94 prints the rate tables for taxable years beginning on or after January 1, 2020 as fixed dollar amounts; the section contains no inflation adjustment.
|
std_deduction_single, std_deduction_mfj, senior_subtraction_single, senior_subtraction_mfj, blind_exemption, dep_exemption | Fixed in law: held at the rules-year amount in every later year. | N.J.S.54A:3-1 (as last amended by P.L.2019, c.146) sets $1,000 per taxpayer and spouse, $1,500 per dependent, $1,000 for age 65+ and $1,000 for a blind or disabled taxpayer/spouse; the section has no inflation adjustment.
|
veteran_exemption | Fixed in law: held at the rules-year amount in every later year. | N.J.S.54A:3-1(b)7, as amended by P.L.2019, c.146 (tax years 2019+): $6,000 per honorably discharged veteran; no inflation adjustment.
|
senior_subtraction_min_age | Attained age: the same age in every year. | The senior exemption is for a taxpayer 65 years of age or over at the close of the taxable year: a fixed attained age.
|
blind_exemption_disabled_max_age | Attained age: the same age in every year. | The $1,000 exemption is for a blind OR disabled taxpayer with no age limit in 54A:3-1(b)5-6 (the engine's 1000 means no maximum age).
|
dep_extra_exemption | Fixed in law: held at the rules-year amount in every later year. | The additional $1,000 exemption per dependent under 22 attending a post-secondary institution is N.J.S.A. 54A:3-1.1 (L.1976, c.84), a flat $1,000.00 with no adjustment clause, unamended since 1976: fixed in law. Engine 1.12.0 (settled from the statute; was unknown).
|
dep_extra_student_max_age | Attained age: the same age in every year. | The student must be under age 22 on the last day of the tax year (engine: 21 or younger): a fixed attained age.
|
retirement_income_exclusion_single, retirement_income_exclusion_mfj, retirement_income_exclusion_mfs, nj-exclusion-income-bands (a table held in code) | Fixed in law: held at the rules-year amount in every later year. | N.J.S.54A:6-10(b) as amended by P.L.2021, c.129: up to $100,000 joint / $75,000 single / $50,000 MFS for tax years 2020+; from 2021 a 50%/37.5%/25% share at gross income $100,001-$125,000 and 25%/18.75%/12.5% at $125,001-$150,000; none above $150,000. Fixed amounts, no inflation adjustment.
|
other_ret_earned_limit, other_ret_income_limit | Fixed in law: held at the rules-year amount in every later year. | C.54A:6-15(a) as amended by P.L.2021, c.129: the other-retirement-income exclusion requires no more than $3,000 of wage/business income and gross income not over $150,000; fixed amounts.
|
retirement_exclusion_min_age, conversion_exclusion_min_age, other_ret_min_age, retirement_disabled_age | Attained age: the same age in every year. | Both exclusions are for a person 62 years of age or older, or (pension exclusion) a person eligible for Social Security disability: a fixed attained age.
|
dis_income_max_age | Attained age: the same age in every year. | Disability pension benefits are treated as disability pay until the year the recipient turns 65: a fixed attained age.
|
gross_no_tax_single, gross_no_tax_joint | Fixed in law: held at the rules-year amount in every later year. | N.J.S.54A:2-4 lists the no-tax gross income thresholds as dated dollar amounts ($10,000 single and married filing separately from 1999/2001; $20,000 joint and head of household from 2001) with no adjustment clause; last amended P.L.1999, c.260: fixed in law. Engine 1.12.0 (settled from the statute; was unknown).
|
pt_deduction_cap, pt_deduction_cap_mfs, pt_credit, pt_credit_mfs | Fixed in law: held at the rules-year amount in every later year. | N.J.S.A. 54A:3A-17 to -20: the $15,000 ($7,500) deduction cap and the $50 ($25) credit are statutory dollar amounts with no adjustment clause: fixed in law.
|
Enacted for later years, not applied by the projection
None found: the research found no change enacted for years after 2026 beyond the schedules above.
What the engine does not calculate, and known approximations
- The New Jersey child tax credit is refundable and the dependent care credit needs expenses; neither is calculated. Sources: 2025 Form NJ-1040 Instructions (checked 2026-10-12).
- The part of an IRA withdrawal or pension that returns contributions New Jersey already taxed is not calculated (the NJ-1040 excludable amount on line 20b: New Jersey never allowed a deduction for IRA contributions): the whole federally taxable amount is treated as New Jersey income. Sources: Retirement Income Exclusions (checked 2026-10-12); 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion) (checked 2026-10-12).
- The special exclusion for filers who will never receive Social Security or Railroad Retirement benefits is not calculated: the inputs do not say that a person can never receive them. Sources: Retirement Income Exclusions (checked 2026-10-12); 2025 Form NJ-1040 Instructions (Line 28a Pension/Retirement Exclusion) (checked 2026-10-12).
- Married couples whose residency differs (engine 1.13.0): when one spouse is a full-year resident and the other a part-year resident, the joint return is not calculated: New Jersey requires the joint return, and no Division document says how the joint part-year NJ-1040 (one residency period) combines a full-year resident's income with a part-year spouse's or prorates the exemptions; when both spouses are part-year residents with different resident periods, the joint return is not calculated: New Jersey requires the joint return, and no Division document says how the joint part-year NJ-1040 (one residency period) handles two different residency periods. Sources: 2025 Form NJ-1040 Resident Return Instructions (checked 2026-10-12); 2025 Form NJ-1040NR Nonresident Return Instructions (checked 2026-10-12); New Jersey Resident Return NJ-1040NR Instructions (2025) (checked 2026-10-06); 2025 Form NJ-1040 Instructions (checked 2026-10-12).
What the engine does not calculate for any state (itemized deductions, credits beyond those listed, part-year residents, and more) is listed on the calculation order page.
Verification
Worksheet-tested Engine 1.2.0 tests follow the NJ-1040 pension exclusion worksheet (band percentage of the whole pension) and Tables A and B.
- Golden scenarios (hand-computed expected tax, asserted to within $1):
G26NJC,G26NJB. - State-specific unit tests:
test_nj_income_cliff,test_no_state_uses_placeholder_schedule,test_nj_conversion_and_partial_band,test_pa_nj_no_offset,test_nj,test_pa_nj_nothing,test_spouse_share_clamps_c,test_wages_ordinary_elsewhere,test_nj,test_worked_ratios,test_engine_paths,test_nj_worksheet_mfs_hoh_senior,test_disability_rules. - Structural tests covering every state: 10.
- State forms and worksheets followed in the test derivations: NJ-1040 instructions, pension exclusion worksheet; Tax Rate Tables A and B.
Social Security
Social Security benefits are fully exempt: none of the federally taxable amount enters the state base.
API value:
socialSecurityRule: "exempt". The engine's input is the federally taxable amount; income tests use the sum of the income components as the adjusted-gross-income proxy.