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
Estimate Your 2025 Federal and New Jersey State Income Tax
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.
What Is Different About New Jersey's Income Tax
Deductions and exemptions
New Jersey has no standard deduction and does not allow federal itemized deductions. It provides personal exemptions of $1,000 per taxpayer and $1,500 per dependent, plus deductions for medical expenses above 2% of income, property taxes paid or 18% of rent up to $15,000, and certain retirement contributions. The 2025 budget added a 10.75% rate on income above $1 million.
Credits worth knowing
New Jersey's earned income credit is 40% of the federal credit and has been extended to workers 18 and older without children. The child tax credit pays up to $1,000 per child under six for low-income families, and there is a child and dependent care credit, a property tax credit of $50 for those who do not take the deduction, and the ANCHOR property tax relief program claimed separately.
Retirement, capital gains, and other income
Social Security and military pensions are exempt. New Jersey's pension exclusion lets taxpayers 62 and older with income up to $150,000 exclude up to $75,000 of retirement income for single filers or $100,000 for joint filers, with a partial exclusion up to $150,000. Capital gains are taxed as ordinary income at rates up to 10.75%.
Rules summarized from the New Jersey Division of Taxation guidance for tax year 2025. Amounts that index annually are described in general terms; confirm the current figure on the official form instructions.
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.
Where New Jersey Stands Among the 50 States
New Jersey's top rate of 10.75% ranks #4 of the 41 states that tax wages -- among the ten highest in the country. The median top rate across those 41 states is 5.2%, so New Jersey is above the middle of the pack. It is one of 27 states with a graduated schedule, using 7 brackets; the top rate starts at $1,000,000 of taxable income, and the lowest bracket ends at $20,000.
On sales tax the picture is different: New Jersey's combined state and average local rate of 6.60% ranks #30 of 50, against a national median of 7.00%.
New Jersey State Tax at Five Income Levels (2025, single filer)
| Taxable income | New Jersey tax | Effective rate | Marginal rate |
|---|---|---|---|
| $40,000 | $718 | 1.79% | 3.5% |
| $65,000 | $2,099 | 3.23% | 5.525% |
| $100,000 | $4,244 | 4.24% | 6.37% |
| $150,000 | $7,429 | 4.95% | 6.37% |
| $250,000 | $13,799 | 5.52% | 6.37% |
Brackets applied directly to the taxable-income figure shown, before New Jersey-specific deductions, exemptions, or credits. Federal tax is separate and comes on top of every row.
New Jersey vs. Its Neighbors on $75,000 of Taxable Income
A New Jersey resident with $75,000 of taxable income pays about $2,651 in state income tax. Of New Jersey's 3 neighboring states, 1 would tax that income less and 2 would tax it more.
| State | Structure | Tax on $75,000 | Top rate | Sales tax |
|---|---|---|---|---|
| New Jersey (you) | Graduated | $2,651 | 10.75% | 6.60% |
| Pennsylvania | Rate to 3.07% | $2,303 | 3.07% | 6.34% |
| Delaware | Rate to 6.6% | $3,934 | 6.6% | 0% |
| New York | Rate to 10.9% | $3,960 | 10.9% | 8.52% |
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?
The federal figure uses the official IRS 2025 brackets and standard deduction. The New Jersey figure applies the 2025 single-filer rate schedule to the same taxable income; it does not model New Jersey-specific deductions, exemptions, credits, or local income taxes, so treat it as a planning number and confirm with the New Jersey Division of Taxation or a tax professional before filing.
How does New Jersey compare with nearby states?
On $75,000 of taxable income, New Jersey collects about $2,651. Pennsylvania collects $2,303, Delaware collects $3,934, New York collects $3,960. See the comparison table above.
Where does New Jersey rank on state income tax?
New Jersey's top rate of 10.75% ranks #4 of the 41 states with an income tax, against a median top rate of 5.2%. Its combined sales tax of 6.60% ranks #30 of 50.
Does this calculator include federal income tax?
Yes. It estimates your 2025 federal income tax using the official IRS 2025 brackets, then applies the New Jersey rate schedule to the same taxable income and shows both figures plus the combined total.
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.