Bill
Bill > S4930
NJ S4930
NJ S4930Sets flat gross income tax rate at 5.9 percent tax for all taxable income over $37,500 or $75,000, depending on filing status; exempts taxpayers with less income from gross income tax.
summary
Introduced
12/04/2025
12/04/2025
In Committee
12/04/2025
12/04/2025
Crossed Over
Passed
Dead
01/12/2026
01/12/2026
Introduced Session
2024-2025 Regular Session
Bill Summary
This bill revises the gross income tax rates for taxable years beginning on or after January 1, 2026, converting the gross income tax to a flat tax. Under the bill, the tax rate imposed under the gross income tax would be 5.9 percent for all taxable income over: $37,500 for unmarried individuals, married individuals filing separately, or estates and trusts; and $75,000 for married individuals filing jointly, individuals filing as head of household, or individuals filing as a surviving spouse for federal income tax purposes. No other rate of tax would be imposed under the gross income tax. Taxpayers with income less than their applicable income threshold would not be subject to tax. Under current law, the gross income tax is imposed in accordance with progressive income tax brackets, with tax rates ranging from 1.4 to 10.75 percent of taxable income. Currently, a taxpayer's filing status and amount of taxable income determines the amount of tax due. No tax is due under current law for single filers, married separate filers, estates, or trusts with not more than $10,000 in taxable income, or married joint filers with taxable income not more than $20,000.
AI Summary
This bill modifies New Jersey's gross income tax system by implementing a flat 5.9% tax rate for taxable years beginning on or after January 1, 2026, replacing the current progressive tax structure. For married individuals filing jointly and those filing as head of household, the 5.9% rate will apply to taxable income over $75,000, while for unmarried individuals, married individuals filing separately, estates, and trusts, the 5.9% rate will apply to taxable income over $37,500. The bill also adjusts the minimum taxable income thresholds for different filing statuses, effectively exempting taxpayers with income below these thresholds from paying gross income tax. Currently, the state uses a complex, multi-tiered tax rate system with rates ranging from 1.4% to 10.75%, depending on income level and filing status. By simplifying the tax structure to a single flat rate, the bill aims to create a more straightforward and potentially more predictable tax calculation for New Jersey residents, with implementation set for the 2026 tax year.
Committee Categories
Budget and Finance
Sponsors (1)
Last Action
Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 12/04/2025)
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/S4930 |
| BillText | https://pub.njleg.gov/Bills/2024/S5000/4930_I1.HTM |
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