Personal income tax
New Jersey's tax system collects income taxes from its residents based on six or seven brackets, depending upon filing status.
Single taxpayers and married taxpayers filing separate returns face six rates:
- 1.4 percent on the first $20,000 of taxable income.
- 1.75 percent on taxable income between $20,001 and $35,000.
- 3.5 percent on taxable income between $35,001 and $40,000.
- 5.525 percent on taxable income between $40,001 and $75,000.
- 6.37 percent on taxable income between $75,001 and $500,000.
- 8.97 percent on taxable income of more than $500,000.
Married taxpayers filing jointly, qualifying widow or widower and head of household filers face seven rates:
- 1.4 percent on the first $20,000 of taxable income.
- 1.75 percent on taxable income between $20,001 and $50,000.
- 2.45 percent on taxable income between $50,001 and $70,000.
- 3.5 percent on taxable income between $70,001 and $80,000.
- 5.525 percent on taxable income between $80,001 and $150,000.
- 6.37 percent on taxable income between $150,001 and $500,000.
- 8.97 percent on taxable income of more than $500,000.
New Jersey tax returns are due April 15 or the next business day if that date falls on a weekend or holiday.
Sales taxes
New Jersey's sales tax rate is 7 percent.
All retail sales are taxable unless specifically exempt by law.
A compensating use tax is also imposed when taxable goods and services are purchased and New Jersey sales tax is either not collected or is collected at a rate less than New Jersey’s sales tax rate.
Personal and real property taxes
All real property and tangible personal property located in the state of New Jersey is subject to property tax unless specifically exempted by statute.
The assessed valuation of real property is based on 100 percent of the fair market value.
An individual's property taxes are then calculated by multiplying that general tax rate by the assessed value of his or her particular property.
Real property taxes are assessed and collected by the assessors and collectors of the respective cities and townships but are subject to supervision and review by the county boards of taxation. Personal property tax is administered by the state.
Property tax payments are due annually in four installments: Feb. 1, May 1, Aug. 1 and Nov. 1.
New Jersey has several homeowner property tax relief programs available to qualified New Jersey homeowners.
Inheritance and estate taxes
New Jersey collects an inheritance tax. For transfer inheritance tax purposes, New Jersey's Domestic Partnership Act applies to decedents dying on or after July 10, 2004. It exempts all transfers made by will, survivorship or contract to a surviving domestic partner.
In addition to the inheritance tax, New Jersey imposes a separate estate tax, which may be applicable even in cases where no New Jersey inheritance tax is due.
Previously, the state's estate tax was tied to federal estate tax laws. Since 2001 changes to the federal code would have phased out New Jersey's estate tax based on the state credit amount, lawmakers decoupled from the federal rules. Now, state law preserves the estate tax as it existed prior to 2002.
The New Jersey Division of Taxation created a brochure that offers more information about the state's estate and inheritance taxes.
Other New Jersey tax facts
New Jersey taxpayers can file and pay their taxes online and check the status of any refunds. Details on these electronic options can be found at the New Jersey Department of Taxation e-file page.
New Jersey officials are seeking help from law-abiding Garden State taxpayers in catching tax scofflaws via the CATCH program, Citizens Against Tax Cheats. Residents can report individuals and businesses they suspect of not paying their full tax burden to the state's tax cheat hotline at (609) 292-6400.