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Bill > S3329
NJ S3329
NJ S3329Excludes certain contributions to deferred compensation plans and provides deduction for certain individual retirement savings under the gross income tax.
summary
Introduced
02/05/2026
02/05/2026
In Committee
02/05/2026
02/05/2026
Crossed Over
Passed
Dead
Introduced Session
2026-2027 Regular Session
Bill Summary
This bill excludes from gross income taxation the elective contributions that employees of the public and non-profit sectors make toward their retirement savings, and allows a deduction for federally qualifying IRA contributions. The New Jersey gross income tax currently allows the employees of private, for profit, businesses to make tax-deferred contributions to the retirement savings plans authorized under section 401(k) of the federal Internal Revenue Code. Employees of the public and nonprofit sectors do not enjoy the same access to 401(k) plans as private sector employees. This bill expands the current provision to incorporate tax deferrals for the elective deferred compensation systems allowed to employees of governments and nonprofits. Charitable, educational and religious organization employees and public school employees are authorized by federal law to contribute toward their retirement savings under plans established under subsection (b) of section 403 of the federal Internal Revenue Code of 1986. State and local government and authority employers are authorized by federal law to make contributions under plans established under section 457 of the federal Internal Revenue Code, and federal employees are authorized by the federal Internal Revenue Code to make contributions to the federal Thrift Savings Plan. This bill gives the employees of federally tax-exempt charitable, educational or religious organizations; the employees of public school systems; the employees of state and local government and federal employees similar tax incentives for retirement savings that are provided under the New Jersey gross income tax to private sector employees. This bill also allows a gross income tax deduction for contributions to individual retirement accounts, or premiums paid to individual retirement annuities, that qualify for federal income tax deductions. IRA's are a significant retirement savings vehicle for employees whose employers do not offer a pension plan.
AI Summary
This bill expands tax benefits for retirement savings for public and non-profit sector employees, aligning them with those already available to private sector employees. Specifically, it excludes elective contributions made by these employees to their retirement plans from New Jersey's gross income tax. This includes contributions to plans authorized under section 401(k) of the federal Internal Revenue Code for private sector workers, and now extends similar tax deferrals to employees of governments and non-profits who contribute to elective deferred compensation systems allowed under federal law, such as those established under section 403(b) for charitable, educational, and religious organizations, section 457 for government entities, and the federal Thrift Savings Plan for federal employees. Additionally, the bill allows individuals to deduct contributions made to Individual Retirement Accounts (IRAs) or premiums paid for individual retirement annuities, provided these accounts or annuities qualify for federal income tax deductions under section 219 of the federal Internal Revenue Code, which is a significant retirement savings tool for those without employer-sponsored pension plans.
Committee Categories
Budget and Finance
Sponsors (1)
Last Action
Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 02/05/2026)
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/2026/S3329 |
| BillText | https://pub.njleg.gov/Bills/2026/S3500/3329_I1.HTM |
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