Bill > S2565

Introduced Session

This bill excludes from gross income taxation the payments that employees of federally tax-exempt charitable organizations, like hospitals, churches, social welfare organizations and educational institutions, and employees of public school systems may make toward retirement savings, as authorized under subsection (b) of section 403 of the federal Internal Revenue Code of 1986. The federal Internal Revenue Code allows employees of these tax exempt organizations to make "salary reduction agreements" with their employers, plans under which the employees may individually choose to receive less current salary (subject to limits) and instead purchase annuity contracts or invest in mutual funds for their retirement. These retirement savings are not subject to federal taxation until amounts are later distributed. The New Jersey gross income tax currently allows the employees of private, for-profit, businesses to make such tax-deferred contributions to the retirement savings plans authorized under section 401(k) of the federal Internal Revenue Code but does not allow tax-deferred contributions to the retirement savings plans authorized under section 403(b) of the Internal Revenue Code. This bill gives the employees of federally tax-exempt charitable organizations and employees of public school systems the same tax incentives for retirement savings that are provided to the employees of for-profit businesses.

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Tony Bucco (R)*, 

Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee (on 02/08/2024)

Official Document