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Bill > S4317
NJ S4317
NJ S4317Excludes contributions made to certain retirement savings plans under gross income tax.
summary
Introduced
05/12/2025
05/12/2025
In Committee
05/12/2025
05/12/2025
Crossed Over
Passed
Dead
Introduced Session
2024-2025 Regular Session
Bill Summary
This bill provides taxpayers a gross income tax exclusion in the amount of contributions made to certain retirement plans that qualify for federal income tax benefits. The affected types of plans are: (1) a plan established under section 401(a) or section 401(k) of the federal Internal Revenue Code; (2) amounts paid for annuity contracts under section 403(b) of the federal Internal Revenue Code, allowed to employees of governments and nonprofits; (3) a deferred compensation plan of a state or local government that meets the requirements of section 457 of the federal Internal Revenue Code; (4) a federal Thrift Savings Plan; or (5) a standard Individual Retirement Account pursuant to section 408 of the federal Internal Revenue Code. The contributions to these plans are taxed upon distribution from the account. The bill applies to contributions made or premiums paid in taxable years beginning on or after the January 1 next following the bill's enactment.
AI Summary
This bill amends New Jersey's gross income tax law to exclude contributions made to certain retirement savings plans from taxable income. Specifically, the bill provides a gross income tax exclusion for contributions to several types of federally recognized retirement plans, including: 401(k) plans, qualified pension plans, 403(b) annuity contracts for government and nonprofit employees, 457 deferred compensation plans for state and local governments, the federal Thrift Savings Fund, and Individual Retirement Accounts (IRAs). The bill clarifies that these contributions will be taxed when they are distributed from the account, and the method for determining the taxable portion of a distribution will be the same as the method used for federal income tax purposes. The changes will apply to contributions made or premiums paid in taxable years beginning on or after the January 1 following the bill's enactment. This legislation aims to align New Jersey's tax treatment of retirement contributions more closely with federal tax rules, potentially providing tax benefits to employees who contribute to these types of retirement savings plans.
Committee Categories
Budget and Finance
Sponsors (3)
Last Action
Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 05/12/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2024/S4317 |
| BillText | https://pub.njleg.gov/Bills/2024/S4500/4317_I1.HTM |
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