New Jersey has high income taxes — 1.4% to 10.75% — but generous retirement exemptions and no sales tax on essentials.
New Jersey Tax Rates 2026
Single Filers
| Taxable Income | Rate |
|---|---|
| $0 - $20,000 | 1.4% |
| $20,001 - $35,000 | 1.75% |
| $35,001 - $40,000 | 3.5% |
| $40,001 - $75,000 | 5.525% |
| $75,001 - $500,000 | 6.37% |
| $500,001 - $1,000,000 | 8.97% |
| $1,000,001+ | 10.75% |
Married Filing Jointly
| Taxable Income | Rate |
|---|---|
| $0 - $20,000 | 1.4% |
| $20,001 - $50,000 | 1.75% |
| $50,001 - $70,000 | 2.45% |
| $70,001 - $80,000 | 3.5% |
| $80,001 - $150,000 | 5.525% |
| $150,001 - $500,000 | 6.37% |
| $500,001 - $1,000,000 | 8.97% |
| $1,000,001+ | 10.75% |
How Much Will I Pay in New Jersey Tax?
| Taxable Income | Single Tax | Married Tax |
|---|---|---|
| $50,000 | $1,894 | $1,228 |
| $75,000 | $3,276 | $2,350 |
| $100,000 | $4,869 | $3,731 |
| $150,000 | $8,053 | $6,493 |
| $200,000 | $11,238 | $9,678 |
| $500,000 | $30,288 | $28,728 |
| $1,000,000 | $75,138 | $73,578 |
New Jersey vs. Neighboring States
| State | Top Rate | Notes |
|---|---|---|
| New York | 10.9% | Plus NYC 3.876% |
| New Jersey | 10.75% | $1M+ income |
| Pennsylvania | 3.07% | Flat rate |
| Delaware | 6.6% | No sales tax |
| Connecticut | 6.99% | Similar structure |
New Jersey Exemptions and Deductions
Personal Exemptions
| Exemption | Amount |
|---|---|
| Taxpayer | $1,000 |
| Spouse | $1,000 |
| Each dependent | $1,500 |
Deductions
NJ has limited deductions:
| Deduction | Allowed? |
|---|---|
| Medical expenses | Yes |
| Property taxes | Limited |
| Alimony paid | Yes |
| Self-employed health insurance | Yes |
| Student loan interest | No |
| Standard deduction | No |
New Jersey has no standard deduction — you report gross income minus limited deductions.
New Jersey Retirement Income Exclusion
NJ offers retirement income exclusion for those 62+ (or disabled):
2026 Exclusion Amounts
| Filing Status | Age | Maximum Exclusion |
|---|---|---|
| Single | 62+ | $75,000 |
| Married Filing Jointly | 62+ | $100,000 |
Income Limit
To qualify for the full exclusion, your gross income must be under $150,000 (phased out above).
What Qualifies
| Income Type | Eligible? |
|---|---|
| Social Security | Not taxed at all |
| Pension | Yes |
| 401(k)/403(b) | Yes |
| Traditional IRA | Yes |
| Annuities | Yes |
| Military retirement | Exempt (no age limit) |
New Jersey Property Tax
NJ has the highest property taxes in the nation:
| Metric | New Jersey |
|---|---|
| Average effective rate | 2.21% |
| National rank | #1 (highest) |
| Average annual tax | $9,500+ |
| On $500,000 home | ~$11,050 |
Property Tax by County
| County | Average Rate |
|---|---|
| Bergen | 2.27% |
| Essex (Newark) | 2.41% |
| Passaic | 2.76% |
| Hudson (Jersey City) | 1.55% |
| Morris | 2.13% |
| Somerset | 2.10% |
| Camden | 3.19% |
| Middlesex | 2.62% |
New Jersey Property Tax Relief
Homestead Benefit
| Qualification | Credit |
|---|---|
| Senior (65+)/disabled | Up to $1,500 |
| Non-senior homeowner | Up to $1,000 |
| Income limits apply | $150,000-$250,000 |
Senior Freeze (PTR)
Reimburses property tax increases for eligible seniors 65+:
- Income limit: $99,735
- Must have owned home since before specific date
New Jersey Sales Tax
| Rate Type | Amount |
|---|---|
| Standard rate | 6.625% |
| Urban Enterprise Zone | 3.3125% |
| Salem County | 3.3125% |
Sales Tax Exemptions
NJ exempts many items:
| Item | Taxable? |
|---|---|
| Clothing | Exempt |
| Most food | Exempt |
| Prescription drugs | Exempt |
| OTC medicine | Taxable |
| Electronics | Taxable |
| Prepared food | Taxable |
NJ’s clothing and grocery exemption saves significant money.
New Jersey Tax Credits
| Credit | Amount |
|---|---|
| Earned Income Tax Credit | 40% of federal EITC |
| Child Tax Credit | Up to $500/child |
| Dependent Care Credit | Available |
| Property Tax Credit/Deduction | Up to $15,000 deduction |
NJ’s EITC at 40% of federal is among the most generous in the nation.
New Jersey Property Tax Deduction/Credit
| Method | Benefit |
|---|---|
| Deduction (homeowner) | Up to $15,000 |
| Deduction (renter) | 18% of rent |
| Credit (if lower income) | Up to $50 |
Most homeowners take the deduction; renters can deduct 18% of rent as “property taxes paid.”
Who Must File New Jersey Taxes?
You must file if you’re a:
- NJ resident with gross income over:
- Single: $10,000
- Married filing jointly: $20,000
- Part-year resident with NJ income
- Nonresident with NJ source income
New Jersey Filing Options
| Method | Cost |
|---|---|
| NJ Free File | Free (income under $79,000) |
| NJ Online | Free |
| Commercial software | $0-$50 |
| Tax professional | $150-$400 |
Filing deadline: April 15
New Jersey Capital Gains
NJ taxes capital gains as ordinary income:
| Gain Type | State Rate |
|---|---|
| Short-term | Up to 10.75% |
| Long-term | Up to 10.75% |
No exclusion or preferential rate for long-term gains.
New Jersey Local Income Tax
NJ has no local income taxes. Only state income tax applies.
Millionaire’s Tax
NJ has a “millionaire tax” — the 10.75% rate kicks in at $1 million:
| Income | Marginal Rate |
|---|---|
| $999,999 | 8.97% |
| $1,000,000+ | 10.75% |
This creates significant tax planning opportunities around the $1M threshold.
Is New Jersey Tax-Friendly for Retirees?
Somewhat:
- Social Security not taxed
- $100,000 retirement exclusion (married 62+)
- Good EITC for low-income
Challenges:
- Highest property taxes in US
- Retirement exclusion has income limits
- Property taxes often $10,000+/year
Moving Away From New Jersey
Many residents relocate to:
- Florida — No income tax
- Pennsylvania — 3.07% flat, no retirement tax
- Delaware — No sales tax, moderate income tax
Bottom Line
New Jersey has progressive income tax rates from 1.4% to 10.75%, with the top rate applying to income over $1 million. Property taxes are the highest in the nation at 2.21% average. Retirement income gets a $75,000-$100,000 exclusion for those 62+, and Social Security isn’t taxed. Sales tax exemptions on clothing and groceries provide some relief. The overall tax burden is high, especially for wealthy homeowners.