Disclaimer: This calculator gives you an estimate based on tax rates and details found online. These rates may change over time. For the most accurate and up-to-date information, please check the official IRS website and your state’s tax website. Always talk to a tax expert for advice about your personal tax situation.
How We Calculate the Result
The New Jersey Income Tax Calculator uses your household income, filing status, and age to figure out how much state income tax you may owe. It also considers advanced inputs like 401(k) and IRA contributions, itemized deductions, and personal exemptions. These amounts are subtracted from your income to get your taxable income.
Once taxable income is determined, New Jersey’s progressive tax rates are applied—meaning different portions of your income are taxed at increasing rates. The final result shows your estimated tax, effective tax rate, and whether you need to file a federal tax return based on your age and filing status.
About New Jersey Income Tax
New Jersey has a progressive income tax system, which means the more you earn, the higher the rate you may pay. The tax rates start at 1.4% and can go up to 10.75% for very high incomes (above $1 million).
This tax applies to most types of income like wages, salaries, bonuses, and investment earnings. Unlike some states, New Jersey has multiple income brackets, which means your income is divided into portions, and each portion is taxed at a different rate. The state also allows deductions like retirement contributions, itemized deductions, and exemptions to reduce taxable income.
There’s no single flat tax rate. Instead, the rates increase with your income. For example, the first $20,000 is taxed at 1.4%, and as your income grows, higher portions are taxed at rates like 3.5%, 5.5%, and so on—up to 10.75%.
Frequently Asked Questions
What is the income tax rate in New Jersey?
New Jersey uses a progressive tax system with rates from 1.4% to 10.75%. The more income you earn, the higher the rate applied to each portion. People making over $1 million pay the highest rate. Lower-income earners pay smaller rates on their income.
When do singles start paying New Jersey income tax?
Single individuals generally start owing New Jersey state income tax when their taxable income exceeds around $10,000 to $15,000, depending on their deductions. However, any taxable income after allowable deductions may be subject to tax starting at 1.4%.
When do married filers start paying New Jersey income tax?
Married couples filing jointly usually begin owing state tax once their taxable income goes above $20,000 to $30,000, depending on deductions and exemptions. Like singles, they are taxed progressively, starting at 1.4% and increasing as their income rises.
Does New Jersey allow standard or itemized deductions?
Yes. New Jersey allows some deductions such as 401(k) or IRA contributions and itemized deductions, but not all the same ones allowed by federal tax rules. The calculator uses the higher of standard or itemized to reduce your taxable income.
Is retirement income taxable in New Jersey?
New Jersey has some exemptions for retirement income. Depending on your age and income level, you may be able to exclude some or all of your pension or retirement income. This helps seniors reduce their tax burden.