Bill
Bill > S3595
NJ S3595
NJ S3595Provides gross income tax exclusion for minimum required distributions from qualified retirement plans.
summary
Introduced
02/19/2026
02/19/2026
In Committee
02/19/2026
02/19/2026
Crossed Over
Passed
Dead
Introduced Session
2026-2027 Regular Session
Bill Summary
This bill excludes from the gross income tax the required distributions from certain retirement plans. Federal law requires a taxpayer aged 72 or older to withdraw a minimum amount each year from certain retirement plans, commonly known as a "required minimum distribution" or an RMD. If the taxpayer does not make the RMD, federal law requires the taxpayer pay a penalty in the amount of 50 percent of the RMD not withdrawn. In effect, an RMD is forced income, which is then subject to federal and State income tax. Under this bill, RMDs will no longer be subject to the New Jersey gross income tax. The exclusion will benefit many New Jersey seniors by reducing their State income tax burden.
AI Summary
This bill provides a gross income tax exclusion for "minimum required distributions" (RMDs) from "qualified retirement plans," which are retirement savings accounts like 401(k)s and IRAs that meet specific federal tax rules. Federal law mandates that individuals aged 72 and older must withdraw a minimum amount from these plans annually to prevent unlimited tax deferral, and failure to do so incurs a significant penalty. Currently, these RMDs are considered taxable income at both the federal and state levels. This legislation, by excluding RMDs from New Jersey's gross income tax, aims to reduce the tax burden on many senior citizens in the state.
Committee Categories
Budget and Finance
Sponsors (1)
Last Action
Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 02/19/2026)
Official Document
bill text
bill summary
Loading...
bill summary
Loading...
bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2026/S3595 |
| BillText | https://pub.njleg.gov/Bills/2026/S4000/3595_I1.HTM |
Loading...