New Jersey State Income Tax Basics
Welcome to our comprehensive guide on New Jersey State Income Tax. This guide provides detailed information on income tax brackets, wage charts, and rate tables, helping you understand how state income tax is calculated. Whether you're an employee or an employer, this resource will aid in accurate tax withholding and compliance with New Jersey's tax regulations.
State Income Tax Brackets
New Jersey's income tax system mirrors the federal income tax structure, with rates determined by income tax brackets. Each bracket corresponds to a specific income range, and income within that range is taxed at the corresponding rate. Refer to the table below for New Jersey's income tax rate codes and rates. For more detailed information, please visit the NJ W-4 Form
Wage Chart
- Locate your wage amount in the left-hand column.
- Locate the total for all additional wages (including those of your spouse or civil union partner) along the top row.
- Follow along the row containing your wage amount until reaching the column containing the additional wages.
- The intersection indicates the Withholding Table that most accurately represents your income scenario.
Total Of Other Wage | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Your Wages | $0 - $10,000 | $10,001 - $20,000 | $20,001 - $30,000 | $40,001 - $40,000 | $50,001 - $40,000 | $60,001 - $40,000 | $70,001 - $40,000 | $80,001 - $40,000 | $90,001 or more |
| $0 - $10,000 | B | B | B | B | B | B | B | B | B |
| $10,001 - $20,000 | B | B | B | B | C | C | C | C | C |
| $20,001 - $30,000 | B | B | B | A | A | D | D | D | D |
| $30,001 - $40,000 | B | B | A | A | A | A | A | E | E |
| $40,001 - $50,000 | B | C | A | A | A | A | A | E | E |
| $50,001 - $60,000 | B | C | D | A | A | A | E | E | E |
| $60,001 - $70,000 | B | C | D | A | A | E | E | E | E |
| $70,001 - $80,000 | B | C | D | A | A | E | E | E | E |
| $80,001 - $90,000 | B | C | D | E | E | E | E | E | E |
| $90,000 or more | B | C | D | E | E | E | E | E | E |
Rate Tables For Wage Chart
The rate tables listed below correspond to the letters in the Wage Chart on the front page. Use these to estimate the amount of withholding that will occur if you choose to use the wage chart. Compare this to your estimated income tax liability for your New Jersey Income Tax return to see if this is the correct amount of withholding that you should have.
Rate Code A
| Income Range | Tax Rate |
|---|---|
| $0 to $20000 | 1.5% |
| $20000 to $35000 | 2% |
| $35000 to $40000 | 3.9% |
| $40000 to $75000 | 6.1% |
| $75000 to $500000 | 7% |
| $500000 to $1000000 | 9.9% |
| $1000000 or more | 11.8% |
Rate Code B
| Income Range | Tax Rate |
|---|---|
| $0 to $20000 | 1.5% |
| $20000 to $50000 | 2% |
| $50000 to $70000 | 2.7% |
| $70000 to $80000 | 3.9% |
| $80000 to $150000 | 6.1% |
| $150000 to $500000 | 7% |
| $500000 to $1000000 | 9.9% |
| $1000000 or more | 11.8% |
Rate Code C
| Income Range | Tax Rate |
|---|---|
| $0 to $20000 | 1.5% |
| $20000 to $40000 | 2.3% |
| $40000 to $50000 | 2.8% |
| $50000 to $60000 | 3.5% |
| $60000 to $150000 | 6.6% |
| $150000 to $500000 | 6.6% |
| $500000 to $1000000 | 9.9% |
| $1000000 or more | 11.8% |
Rate Code D
| Income Range | Tax Rate |
|---|---|
| $0 to $20000 | 1.5% |
| $20000 to $40000 | 2.3% |
| $40000 to $50000 | 2.8% |
| $50000 to $60000 | 3.5% |
| $60000 to $150000 | 6.6% |
| $150000 to $500000 | 6.6% |
| $500000 to $1000000 | 9.9% |
| $1000000 or more | 11.8% |
Rate Code E
| Income Range | Tax Rate |
|---|---|
| $0 to $20000 | 1.5% |
| $20000 to $40000 | 2.3% |
| $40000 to $50000 | 2.8% |
| $50000 to $60000 | 3.5% |
| $60000 to $150000 | 6.6% |
| $150000 to $500000 | 6.6% |
| $500000 to $1000000 | 9.9% |
| $1000000 or more | 11.8% |
How to calculate New Jersey State Income Tax
If your annual wage is $55,000 and your other wage is $3,000, your code will be B according to the wage chart. You can then use the Rate Code B table to calculate your state income tax. The calculation would be as follows:
- Income up to $20,000: $20,000 multiplied by 1.5% equals $300.
- Income from $20,001 to $50,000: $50,000 minus $20,000 equals $30,000. $30,000 multiplied by 2% equals $600.
- Income from $50,001 to $55,000: $55,000 minus $50,000 equals $5,000. $5,000 multiplied by 2.7% equals $135.
Adding these amounts together gives the total state income tax: $300 plus $600 plus $135 equals $1,035. Therefore, if your annual wage is $55,000 and your other wage is $3,000, your total state income tax under Rate Code B will be $1,035.
Income Tax Deductions
New Jersey offers tax deductions and credits to reduce tax liability. Deductions include medical, alimony, and self-employed health insurance expenses. Credits include the earned income tax credit and child and dependent care credit.
Medical Expenses
You may deduct medical expenses paid for yourself, spouse, or dependents, exceeding 2% of gross income.
Alimony Payments
You can deduct court-ordered alimony payments, but not child support.
Self-Employed Health Insurance
Deduct health insurance payments if self-employed for federal tax purposes or earning wages from an S corporation in which you owned more than 2% of shares.