Key Tax Facts: New Jersey
- Top rate of 10.75% on income above $1 million
- Retirement income exclusion up to $100,000 (joint) for those 62+
- Property Tax Deduction/Credit available for homeowners and renters
- New Jersey does not allow deductions for federal taxes paid
New Jersey State Income Tax Overview
New Jersey has one of the most progressive income tax systems in the country, with seven brackets ranging from 1.4% to 10.75% for 2025. Here is how the brackets apply to single filers: 1.4% on income up to $20,000; 1.75% on $20,001-$35,000; 3.5% on $35,001-$40,000; 5.525% on $40,001-$75,000; 6.37% on $75,001-$500,000; 8.97% on $500,001-$1,000,000; and 10.75% on income above $1,000,000. Married couples filing jointly have different bracket thresholds. To illustrate with a real example: a single New Jersey filer earning $60,000 in taxable income owes approximately $2,202 in state income tax - an effective rate of about 3.7%, even though dollars above $40,000 are taxed at 5.525%. New Jersey provides a property tax credit of up to $1,500 for homeowners and renters, and exempts Social Security and Railroad Retirement benefits from state income tax. The state does not provide a standard deduction for single filers, but does offer personal exemptions of $1,000 per taxpayer and various credits. New Jersey is notable for having some of the highest property taxes in the nation, averaging over $9,000 per year statewide, which is important context when evaluating overall tax burden. Military retirement pay is fully exempt for New Jersey residents.
New Jersey Income Tax Brackets (2025)
These are the New Jersey state income tax brackets for tax year 2025. New Jersey applies the same brackets to all filing statuses. Only the income within each bracket is taxed at that rate -- not your entire income.
| Taxable Income | Tax Rate |
|---|---|
| $0 - $20,000 | 1.4% |
| $20,000 - $35,000 | 1.75% |
| $35,000 - $40,000 | 3.5% |
| $40,000 - $75,000 | 5.525% |
| $75,000 - $500,000 | 6.37% |
| $500,000 - $1,000,000 | 8.97% |
| Over $1,000,000 | 10.75% |
Source: New Jersey Division of Taxation. New Jersey applies these brackets to all filing statuses.
What a New Jersey Resident Actually Pays: A Worked Example
Your effective tax rate is almost always lower than your top bracket. Here is how the math works for a single filer earning $65,000.
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Frequently Asked Questions -- New Jersey Income Tax
Does New Jersey have a state income tax?
Yes. New Jersey imposes a state income tax with a top marginal rate of 10.75%. This is separate from your federal income tax obligation.
What is the New Jersey income tax rate for 2025?
New Jersey uses a graduated income tax system with rates from 1.4% to 10.75%. Only the income within each bracket is taxed at that bracket's rate -- not your entire income.
Do I have to file a New Jersey state tax return?
Most full-year New Jersey residents with income above the state filing threshold must file a state return. Check the New Jersey Division of Taxation for current thresholds and requirements.
How accurate is this estimate?
This is a planning estimate of your federal income tax only. It does not calculate New Jersey state tax, and it does not account for state deductions, credits, exemptions, or local taxes. Use the New Jersey rate schedule above as a reference, and verify with official New Jersey tax forms or a qualified tax professional.
Does this calculator include federal income tax?
Yes. The calculator estimates your 2025 federal income tax using the official IRS 2025 brackets. It does not compute your New Jersey state tax -- see the New Jersey rate schedule below to work that out.
Where can I find official New Jersey tax forms?
Official forms, instructions, and filing guidance are available at the New Jersey Division of Taxation.
What is the sales tax rate in New Jersey?
New Jersey's combined state and average local sales tax rate is 6.60%. This is separate from income tax and applies to most retail purchases -- use our sales tax calculator to check a specific purchase.
When are New Jersey 2025 state taxes due?
2025 taxes are generally filed in 2026. The New Jersey filing deadline is April 15, 2026, the same as the federal deadline.
Understanding Your New Jersey Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and New Jersey state tax owed to the New Jersey Division of Taxation. The state return is filed separately from your federal Form 1040, with a state filing deadline of April 15. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Lowering Your New Jersey Bill
Pre-tax retirement contributions reduce your federal and New Jersey taxable income in the same move -- see our 401(k) contribution limits and HSA limits guides for the current caps. Beyond that, New Jersey-specific credits and deductions that don't exist at the federal level are listed at the New Jersey Division of Taxation -- worth checking, since these are easy to miss if you only look at federal guidance.
Combined Sales + Income Tax Picture
New Jersey's combined state-plus-average-local sales tax rate is 6.60%. If you're self-employed, that's an added layer on top of income tax -- our self-employment tax calculator covers the SE-specific piece separately.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the New Jersey Division of Taxation or a qualified tax professional for guidance specific to your situation.