Bill > S2413

Introduced Session

This bill indexes for inflation various gross income thresholds and qualifications under the New Jersey gross income tax. Under the gross income tax, many provisions are structured so that the provisions apply only to those with particular amounts of income. This bill adjusts those provisions so that income levels are annually adjusted for inflation using the Consumer Price Index for All Urban Consumers (CPI-U), as published by the U.S. Bureau of Labor Statistics. In particular, the bill adjusts for inflation: - the minimum taxable income threshold to be subject to the gross income tax, and the minimum taxable income threshold to file a gross income tax return. The minimum taxable income threshold for both is currently $10,000 for individuals who are single or married filing separately and $20,000 for married filing jointly. Those amounts will be adjusted annually for inflation beginning with tax year 2022. - the income limitation on the three deductions allowed pursuant to the "New Jersey College Affordability Act." Each deduction is currently limited to those with gross income of $200,000 or less. That amount will be adjusted annually for inflation beginning with tax year 2022. - the income limitation on the credit allowed pursuant to the "Wounded Warrior Caregivers Relief Act." That credit is currently limited to those with gross income not exceeding $50,000 or $100,000 if filing jointly. Those amounts will be adjusted annually for inflation beginning with tax year 2022. - the income limitation on the credit for expenses for household and dependent care services. That credit is equal to a percentage that the taxpayer is allowed under the federal income tax, but is reduced and phased out as the taxpayer's income increases to $150,000. The phase out will be adjusted annually for inflation beginning with tax year 2022. - the income limitations on the pension exclusion and other retirement income exclusion. Those exclusions are reduced and phased out as the taxpayer's income increases to $150,000. The phase out for each deduction will be adjusted annually for inflation beginning with tax year 2022. - for those required to make estimated income tax payments, the income threshold for additional estimated payments to avoid incurring underpayment penalties. Because of the complexity of exactly estimating tax payments, an alternative amount of payment is allowed to be paid without incurring penalties for underpayment of estimated tax. If a taxpayer makes payments equal to 100 percent of the taxpayer's tax liability for the previous year, or 110 percent for taxpayers with taxable income for the preceding taxable year exceeding $75,000 or $150,000 for those filing jointly, then the taxpayer will not incur penalties for underpayment of estimated tax. The income criteria for the 110 percent payment requirement will be adjusted annually for inflation beginning with tax year 2022. - the income limitation on the rebate allowed for those with a dependent child. That rebate is currently limited to those with gross income not exceeding $75,000 or $150,000 if filing jointly. Those amounts will be adjusted annually for inflation beginning with tax year 2022. - the income tax brackets and tax amounts per bracket under the optional pass-through business alternative income tax. These income tax brackets and tax amounts per bracket are currently structured to approximate tax liability under the gross income tax. The income tax brackets and tax amounts per bracket will be adjusted annually for inflation beginning with tax year 2022 to conform with the changes to the gross income tax brackets and tax amounts per bracket proposed in Senate Bill No. 676 of the 2022-2023 session.

AI Summary

Committee Categories

Tony Bucco (R)*,  Paul Sarlo (D)*,  Patrick Diegnan (D),  Parker Space (R), 

Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 01/13/2026)

Official Document