Bill > S951

Introduced Session

This bill excludes from gross income taxation the elective contributions that employees of the public and non-profit sectors make toward their retirement savings, and allows a deduction for federally qualifying IRA contributions. The New Jersey gross income tax currently allows the employees of private, for profit, businesses to make tax-deferred contributions to the retirement savings plans authorized under section 401(k) of the federal Internal Revenue Code. Employees of the public and nonprofit sectors do not enjoy the same access to 401(k) plans as private sector employees. This bill expands the current provision to incorporate tax deferrals for the elective deferred compensation systems allowed to employees of governments and nonprofits. Charitable, educational and religious organization employees and public school employees are authorized by federal law to contribute toward their retirement savings under plans established under subsection (b) of section 403 of the federal Internal Revenue Code of 1986. State and local government and authority employers are authorized by federal law to make contributions under plans established under section 457 of the federal Internal Revenue Code, and federal employees are authorized by the federal Internal Revenue Code to make contributions to the federal Thrift Savings Plan. This bill gives the employees of federally tax-exempt charitable, educational or religious organizations; the employees of public school systems; the employees of state and local government and federal employees similar tax incentives for retirement savings that are provided under the New Jersey gross income tax to private sector employees. This bill also allows a gross income tax deduction for contributions to individual retirement accounts, or premiums paid to individual retirement annuities, that qualify for federal income tax deductions. IRA's are a significant retirement savings vehicle for employees whose employers do not offer a pension plan.

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Shirley Turner (D)*, 

Combined with S737 (SCS) (on 02/28/2022)

Official Document