NJ Tax Breaks Take Effect January 1st

Dec 26, 2017

New Jersey Statehouse

The new year will bring some tax changes in New Jersey.

A 2016 law that raised the state tax gas also provides for tax breaks taking effect January 1st.

Senator Steve Oroho says for residents 62 and older, the amount of pensions and other retirement income excluded from the state income tax goes up to $45,000 for individuals and $60,000 for those who file joint returns.

"I actually do think It'll keep more people here in the state. Our retirees do want to stay around by their families."

The estate tax will be completely eliminated.

Governor Chris Christie says that could encourage wealthy residents to stay in New Jersey.

"If you also had a $675,000 estate tax here, adding to what's happened at the federal level, and if we don't get any relief at the state level, people are incentivized to go. And the older they get, the more incentivized they are to go."

Ralph Thomas is the CEO of the New Jersey Society of CPAs. He hopes Governor-elect Phil Murphy retains the tax breaks.

“If the new administration comes in and puts forth proposals to change those things, I think you’ll find people saying I need to find a place where there’s a lot more certainty so I can plan for the future that’s ahead of me.”

The state sales tax will go down a quarter-of-a-percent to 6.625 percent on New Year’s Day.  Thomas say most residents probably won't notice that unless they buy a car or make another major purchase.