New Jersey requires every resident and non-resident earning an income in the state to pay state income taxes. Typically, you will need to file your federal tax return first, then use the same information to file your state tax return. New Jersey has a progressive tax structure, with credits and deductions available for eligible taxpayers to reduce the tax obligations.
New Jersey personal income tax rates: Table
Single and separate filers in New Jersey have seven tax rates, while joint filers have eight.
|New Jersey personal income tax rates|
|Tax rate||Single||Tax rate||Married, filing jointly|
|10.75%||$5,000,001 or more||8.97%||$500,001-$5,000,000|
|10.75%||$5,000,001 or more|
|Source: New Jersey Division of Taxation|
There are several forms of tax-exempt income in New Jersey, which include Social Security benefits, military pensions, disability benefits and unemployment compensation.
Learn about other ways to reduce your tax obligations this year in our new video series.
Who has to file New Jersey state taxes?
Any resident with a New Jersey income source above the taxable amount minimum is subject to income tax. The same applies to part-year residents (those who spend less than 180 days in the state during the year) and non-residents earning an income in New Jersey. Earnings include wages and salaries, rent from a leased property in the state, lottery and gaming winnings, and income from goods and services within the state.
New Jersey sales tax rate: Table
New Jersey imposes a sales tax on the transfer of tangible goods within the state, and a use tax for goods purchased elsewhere but consumed or stored in the state. The rate of sales tax in New Jersey is 6.625 percent, ranking eighth in the country, according to the Tax Foundation.
|New Jersey sales tax rate|
|Sales tax rate||National rank|
|Source: Tax Foundation|
Several items are exempt from sales tax in New Jersey, such as over-the-counter and prescription drugs, groceries, clothing and footwear and real estate sales.
Other things to know about New Jersey state taxes
The average property tax rate in New Jersey is high, at 2.42 percent, compared to the national average of 1.07 percent. The rate largely depends on the value of the property and the exact location, and in some counties – such as Camden and Gloucester – it can be higher than 3 percent.
New Jersey also imposes estate and inheritance taxes on the assets of a deceased person. The rates depend on the value of the estate and the relationship between the beneficiary and the decedent.