About New Jersey State Income Tax

New Jersey has a highly progressive tax system with seven tax brackets. The state has one of the highest top tax rates in the nation at 10.75%, which applies to income over $1 million.

New Jersey Tax Brackets 2026 (Single Filers)

• $0 - $20,000: 1.4%
• $20,001 - $35,000: 1.75%
• $35,001 - $40,000: 3.5%
• $40,001 - $75,000: 5.525%
• $75,001 - $500,000: 6.37%
• $500,001 - $1,000,000: 8.97%
• Over $1,000,000: 10.75%

How New Jersey Tax is Calculated

New Jersey uses a progressive bracket system:

1. Income is divided into seven tax brackets
2. Each portion is taxed at its corresponding rate
3. High earners face the top rate of 10.75% on income over $1 million
4. Federal tax is calculated separately

New Jersey Tax Features

• High Top Rate: 10.75% is among the highest in the US
• Progressive System: Lower earners pay much less
• Property Tax Credit: Available to offset high property taxes
• Retirement Exemptions: Some retirement income may be exempt

Frequently Asked Questions

Why are New Jersey taxes so high?

New Jersey has high taxes to fund extensive state services, education, and infrastructure. The state also has some of the highest property taxes in the nation, which combined with income tax creates a high overall tax burden.

What is New Jersey's top tax rate?

New Jersey's top income tax rate is 10.75%, which applies to income over $1 million for single filers and over $1 million for married couples filing jointly.

Does New Jersey tax retirement income?

New Jersey offers exemptions for retirement income. Those 62 and older with income under certain thresholds can exclude up to $100,000 (married) or $75,000 (single) of retirement income.

How does NJ compare to neighboring states?

New Jersey (10.75% top rate) has much higher taxes than Pennsylvania (3.07%), Delaware (6.6%), and New York (10.9% for NYC residents with city tax). Only New York City residents pay comparable rates.

New Jersey vs. Neighboring States

Tax comparison with surrounding states:

• Pennsylvania: 3.07% flat rate (much lower)
• New York: Up to 10.9% (with NYC tax)
• Delaware: Progressive up to 6.6%
• Connecticut: Progressive up to 6.99%

Tips for New Jersey Taxpayers

• Maximize retirement account contributions to reduce taxable income
• Claim property tax credit if eligible
• Seniors should review retirement income exemptions
• Consider moving income-generating assets if appropriate
• Work with a tax professional for complex situations