Disclaimer: Calculations are estimates based on tax rates as of Jan. 2023 and data from the Tax Foundation. These rates are subject to change. Check the IRS website for the latest information about income taxes and your state tax website for state-specific information. Our calculator doesn’t consider both 401k and IRA deductions due to the tax law limitations. Please note, the amount of your IRA deductions may vary. You should speak with a tax professional to determine your tax situation.
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What You Need To Know About New Jersey State Taxes
New Jersey requires you to pay taxes if you are a resident or a nonresident who receives income from a New Jersey source. The state income tax rates range from 1.4% to 10.75%, and the sales tax rate is 6.625%.
New Jersey offers tax deductions and credits to reduce your tax liability, including deductions for medical, alimony, and self-employed health insurance expenses. The state also offers tax credits, including the earned income tax credit and child and dependent care credit.
New Jersey Income Tax Brackets and Rates: Single or Married/Civil Union Partner Filing Separately
| If your New Jersey taxable income is over: | But not over: | Your tax is: |
|---|---|---|
$0 | $20,000 | 1.4% of your income |
$20,000 | $35,000 | 1.75% of the excess over $20,000, minus $70.00 |
$35,000 | $40,000 | 3.5% of the excess over $35,000, minus $682.50 |
$40,000 | $75,000 | 5.525% of the excess over $40,000, minus $1,492.50 |
$75,000.00 | $500,000 | 6.37% of the excess over $75,000, minus $2,126.25 |
$500,000 | $1,000,000 | 8.97% of the excess over $500,000, minus $15,126.25 |
$1,000,000 | — | 10.75% of the excess over $1,000,000, minus $32,926.25 |
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New Jersey Income Tax Brackets and Rates: Married/Civil Union Filing Jointly, Qualified Widow(er) or Head of Household
| If your New Jersey taxable income is over: | But not over: | Your tax is: |
|---|---|---|
$0 | $20,000 | 1.4% of your income |
$20,000 | $50,000 | 1.75% of the excess over $20,000, minus $70.00 |
$50,000 | $70,000 | 2.45% of the excess over $50,000, minus $420.00 |
$70,000 | $80,000 | 3.5% of the excess over $70,000, minus $1,154.50 |
$80,000 | $150,000 | 5.525% of the excess over $80,000, minus $2,775.00 |
$150,000.00 | $500,000 | 6.37% of the excess over $150,000, minus $4,042.50 |
$500,000 | $1,000,000 | 8.97% of the excess over $500,000, minus $17,042.50 |
$1,000,000 | — | 10.75% of the excess over $1,000,000, minus $34,842.50 |
New Jersey Income Tax Deductions
Medical Expenses
You may deduct medical expenses you paid during the year for yourself, your spouse or domestic partner and any claimed dependents—but only when the total exceeds 2% of your gross income. Allowable medical expenses include fees for doctor visits, prescription medicines, medical insurance premiums and the like. If a medical expense is reimbursed, however, you can’t deduct it.
Alimony Payments
You can deduct any court-ordered alimony payments on your tax return, but you can’t deduct child support payments.
Self-Employed Health Insurance
You can deduct the amount you paid for health insurance if you’re considered self-employed for federal tax purposes, or if you earn wages from an S corporation in which you owned more than 2% of shares. You can claim amounts you paid for yourself, your spouse, your civil union partner, your domestic partner and any dependents.
New Jersey State Income Tax Credits
Earned Income Tax Credit
You can claim the New Jersey earned income tax credit (NJEITC) if you have claimed the federal earned income tax credit (EITC). Both the federal and state versions are refundable. Your NJEITC is 40% of your federal EITC amount. For example, if your federal EITC is $4,000, you may qualify for a NJEITC of $1,600.
Your earned income tax credit may be prorated if you were a part-time resident.
Child and Dependent Care Credit
You can claim the state’s child and dependent care credit if you qualify for the federal version and your New Jersey income is less than $150,000. The state credit is refundable.
You may qualify if you paid someone to care for your child under the age of 13 or for a spouse or dependent who lived with you for more than half of the year and can’t physically or mentally care for themselves.
Your state child and dependent care credit is a percentage of your federal child and dependent care credit. The percentage is based on your New Jersey income as follows:
| If your New Jersey income is: | The amount of your NJ child and dependent care credit is: |
|---|---|
Not more than $30,000 | 50% of the federal credit amount |
Over $30,000 but not more than $60,000 | 40% of the federal credit amount |
Over $60,000 but not more than $90,000 | 30% of the federal credit amount |
Over $90,000 but not more than $120,000 | 20% of the federal credit amount |
Over $120,000 but not more than $150,000 | 10% of the federal credit amount |
Do I Have to File a New Jersey Income Tax Return?
New Jersey requires you to file tax return if your income exceeds certain thresholds—which depend on your filing status—and you fall into one of the following categories:
| You must file if your filing status is: | And your total gross income was more than: |
|---|---|
Single | $10,000 |
Married or civil union partner, filing separate return | $10,000 |
Married or civil union couple, filing joint return | $20,000 |
Head of Household | $20,000 |
Qualifying Widow(er) or surviving civil union partner | $20,000 |
New Jersey Residency Status
You’re considered a resident of New Jersey if you reside within the state, or if you have a permanent home in the state and spend more than 183 days of the year there.
Generally, you’re not considered a resident if one of the following applies to you:
- You didn’t maintain a permanent residence in New Jersey.
- You maintained a permanent home outside of New Jersey.
- You didn’t spend more than 30 days in New Jersey.
Sales Tax and Sales Tax Rates
New Jersey charges a sales and use tax of 6.625%.
Property Tax and Property Tax Deductions and Exemptions
New Jersey assesses a property tax on real estate and provides property tax deductions or exemptions to homeowners, veterans, senior citizens, religious and educational organizations and historic properties.
Capital Gains Taxes
New Jersey allows taxpayers to report gains and losses from the sale of capital assets. All of your capital gains are taxed as ordinary income. New Jersey doesn’t differentiate between short-term or long term capital gains.
Inheritance Tax and Inheritance Tax Exemption
New Jersey has an inheritance tax. When a person dies, the assets are transferred from the deceased to the beneficiary, and the state of New Jersey may impose a tax on the transfer of assets. Conditions differ based on whether the deceased person was a resident or nonresident of the state.
New Jersey does not, however, have an estate tax. It stopped administering that tax as of January 1, 2018.
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