Bill > A5784

Introduced Session

This bill provides a retirement income exclusion under the gross income tax for certain persons with income over $3,000 from part-time employment. Under current law, a taxpayer with income not more than $150,000 may exclude certain pension and annuity income from gross income for State tax purposes. In addition, if the taxpayer is over 62 years of age and earned not more than $3,000 in wage or business income, then the taxpayer may also claim an exclusion for other retirement income. For taxpayers with income not more than $100,000, the amount of each exclusion varies based on the taxpayer's filing status, as follows: $100,000 for a married couple filing jointly; $50,000 for a married person filing separately; and $75,000 for an individual filing as a single taxpayer. However, if a taxpayer claims both exclusions, the total value of the combined exclusions may not exceed the amounts otherwise allowable for each separate exclusion (e.g., $100,000, $75,000, or $50,000). Under the bill, a person who otherwise qualifies for the other retirement income exclusion (i.e., a person aged 62 years or older and with gross income not more than $150,000), but earned income over $3,000 from part-time wages, may also receive an exclusion for other retirement income under the gross income tax. The amount of the exclusion would equal: (1) the amount of the exclusion otherwise allowed for other retirement income, as determined based on the taxpayer's filing status (e.g., $100,000, $75,000, or $50,000); minus (2) the product of 2,000 times the minimum hourly wage rate established for the taxable year (e.g., $12 in taxable year 2021); and minus (3) the amount of the pension and annuity income exclusion claimed by the taxpayer for the taxable year, if applicable. For example, a single taxpayer who is 65 years old, earns income less than $100,000, works fewer than 30 hours a week, and does not collect pension income would be allowed an exclusion from gross income of $26,000 in taxable year 2021 (i.e., $50,000 minus $24,000 minus $0 equals $26,000). Consequently, the bill requires the amount of the exclusion to annually decrease as the State's minimum hourly wage increases. The bill also parallels existing law by providing that the exclusion would complement, but not exceed, the amount of the pension and annuity income exclusion that a taxpayer may claim for the taxable year.

AI Summary

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Michele Matsikoudis (R)*, 

Introduced, Referred to Assembly Commerce and Economic Development Committee (on 11/30/2023)

Official Document