Bill > A1616

This bill amends New Jersey's Gross Income Tax Act to exclude certain contributions to deferred compensation plans from gross income and to allow a deduction for certain individual retirement savings. Specifically, it clarifies that amounts contributed by an employer to qualified retirement plans, such as 401(k) plans, annuity contracts, eligible deferred compensation plans for state and local government employees (section 457 plans), and the federal Thrift Savings Fund, will not be taxed if they are also excluded from federal gross income. Additionally, the bill introduces a new provision allowing taxpayers to deduct contributions made to individual retirement accounts (IRAs) or premiums paid for individual retirement annuities, provided these are deductible for federal income tax purposes under section 219 of the Internal Revenue Code. These changes aim to align New Jersey's tax treatment of these retirement savings with federal law and take effect for taxable years beginning on or after January 1st of the year following the bill's enactment.