New Jersey · the numbers
New Jersey figures at a glance, 2026
The New Jersey numbers for the 2026 return in one place: the two rate schedules, the exemptions, the pension exclusion and its cliff, the property tax deduction, the credits, the college deductions, the property tax relief programs, the inheritance tax, and the dates. Each line with a note on what it means, and a short list of what moved since 2025. For anyone who files here, and for anyone checking a preparer’s work.
By Charles Trautman, EA, editor
Need to Know Tax · written from New Jersey Division of Taxation (Department of the Treasury) sources, November 3, 2026; updated November 12, 2026 after the election · not yet reviewed by a New Jersey practitioner
Almost nothing on the New Jersey return is indexed, so most of these figures are the same as last year. The 2026 rate schedules and exemptions are confirmed in the Division of Taxation’s 2026 NJ-1040-ES instructions; the credits and the pension exclusion are statutory amounts that did not change. What did change is the Child Tax Credit, up 25% for 2026 through 2028, and Stay NJ, cut to a $200,000 income limit with tiered maximums. The property tax relief figures for the 2026 benefit year wait on the June 2027 budget, so that column reads “to come.”
The rate schedules
Tax is figured on New Jersey taxable income (Line 42), which is New Jersey gross income less exemptions and the few New Jersey deductions. There is no standard deduction. The schedules are the same for 2025 and 2026.
| Taxable income over | But not over | Rate | Tax is rate × income, minus |
|---|---|---|---|
| $0 | $20,000 | 1.4% | $0 |
| $20,000 | $35,000 | 1.75% | $70.00 |
| $35,000 | $40,000 | 3.5% | $682.50 |
| $40,000 | $75,000 | 5.525% | $1,492.50 |
| $75,000 | $500,000 | 6.37% | $2,126.25 |
| $500,000 | $1,000,000 | 8.97% | $15,126.25 |
| $1,000,000 | and over | 10.75% | $32,926.25 |
| Taxable income over | But not over | Rate | Tax is rate × income, minus |
|---|---|---|---|
| $0 | $20,000 | 1.4% | $0 |
| $20,000 | $50,000 | 1.75% | $70.00 |
| $50,000 | $70,000 | 2.45% | $420.00 |
| $70,000 | $80,000 | 3.5% | $1,154.50 |
| $80,000 | $150,000 | 5.525% | $2,775.00 |
| $150,000 | $500,000 | 6.37% | $4,042.50 |
| $500,000 | $1,000,000 | 8.97% | $17,042.50 |
| $1,000,000 | and over | 10.75% | $34,842.50 |
The “minus” column is the Division’s shortcut: multiply the whole taxable income by the bracket rate and subtract the figure. Both tables are copied from the 2026 NJ-1040-ES instructions.
Exemptions and the filing threshold
| Item | 2025 | 2026 | Note |
|---|---|---|---|
| Taxpayer; spouse or partner on a joint return | $1,000 each | $1,000 each | Not indexed |
| Age 65 or older | $1,000 each | $1,000 each | New Jersey’s only senior break on the return itself, besides the pension exclusion |
| Blind or disabled | $1,000 each | $1,000 each | Disabled means unable to work because of a physical or mental condition |
| Honorably discharged veteran | $6,000 each | $6,000 each | Each spouse who qualifies; documentation is filed once |
| Each dependent | $1,500 | $1,500 | Any age, if claimed federally |
| Dependent under 22 attending college full time | $1,000 more | $1,000 more | On top of the $1,500 |
| Filing threshold, single or separate | $10,000 | $10,000 | Gross income for the year; file anyway to get withholding back or claim a refundable credit |
| Filing threshold, joint, head of household, qualifying widow(er) | $20,000 | $20,000 | Same |
| Standard deduction | None | None | No itemized deductions either |
| Local income tax | None | None | No city, county or school district taxes wages in New Jersey |
At the 5.525% rate most working households pay at the margin, a $1,000 exemption is worth $55 and a $1,500 dependent exemption $83.
Retirement income
| Total income (Line 27) | Joint | Single, head of household, widow(er) | Married filing separately |
|---|---|---|---|
| $100,000 or less | up to $100,000 | up to $75,000 | up to $50,000 |
| $100,001 to $125,000 | 50% of pension income | 37.5% | 25% |
| $125,001 to $150,000 | 25% of pension income | 18.75% | 12.5% |
| $150,001 or more | $0 | $0 | $0 |
Social Security and Railroad Retirement are not New Jersey income and are not counted in Line 27. Military pensions are exempt in full. The $150,000 line is a cliff: one dollar over it and the whole pension is taxed. Figures from the 2025 NJ-1040 instructions; the exclusion is not indexed. Details in New Jersey for retirees.
Deductions and credits
| Item | Figure | Limit or note |
|---|---|---|
| Property tax deduction (homeowners; renters count 18% of rent) | Property tax paid, up to $15,000 | Or the $50 refundable credit, whichever is better; filers under the $10,000 / $20,000 threshold qualify only if 65 or older, blind or disabled |
| Medical expenses | Unreimbursed costs over 2% of gross income | Plus Archer MSA contributions and self-employed health insurance; no itemizing required |
| Alimony paid under a court order | Full amount | Still deductible for post-2018 divorces; still income to the recipient |
| NJBEST 529 contributions | Up to $10,000 | Gross income $200,000 or less; other states’ plans get nothing |
| Tuition paid to a New Jersey college | Up to $10,000 | Gross income $200,000 or less |
| NJCLASS student loan principal and interest | Up to $2,500 | Gross income $200,000 or less |
| Alternative Business Calculation Adjustment (Schedule NJ-BUS-2) | 50% of net business loss against other business income | New for 2026: 25% at gross income over $500,000, zero at $1,000,000 or more |
| NJ Earned Income Tax Credit | 40% of the federal EITC | Refundable; workers 18 and older qualify with or without children; Social Security number required. 2026 maximums to come (2025: $3,218 with three or more children, $2,861 with two, $1,731 with one, $260 with none) |
| Child Tax Credit, per child 5 or younger | $1,250 / $1,000 / $750 / $500 / $250 | By taxable income tier: $30,000 or less, to $40,000, to $50,000, to $60,000, to $80,000. Refundable; not for married filing separately; 2026–2028 only (2025 was $1,000 down to $200) |
| Child and Dependent Care Credit | 50% / 40% / 30% / 20% / 10% of the federal credit | By taxable income: to $30,000, to $60,000, to $90,000, to $120,000, to $150,000; nothing above $150,000. Refundable; no dollar cap |
| Credit for taxes paid to other jurisdictions (Schedule NJ-COJ) | Lesser of the other tax or the New Jersey tax on the same income | New York, Philadelphia wage tax and other states; not Pennsylvania wages (reciprocity); not foreign taxes |
| Shared Responsibility Payment (no health coverage), individual | $695 to $5,712 | Schedule NJ-HCC; capped at the statewide average bronze premium |
Not deductible: the federal standard or itemized deductions, charitable gifts, mortgage interest, state and local taxes, IRA, 403(b), 457, SEP and SIMPLE contributions (only 401(k) deferrals leave New Jersey wages), QBI, bonus depreciation, and the 2025 federal deductions for tips, overtime, seniors and car loans.
Worked example: the tax on $85,000 of taxable income, single
Table A’s shortcut gives $85,000 × 6.37% − $2,126.25 = $3,288.25. The same figure, bracket by bracket:
| Slice of taxable income | Amount | Rate | Tax |
|---|---|---|---|
| $0 to $20,000 | $20,000 | 1.4% | $280.00 |
| $20,000 to $35,000 | $15,000 | 1.75% | $262.50 |
| $35,000 to $40,000 | $5,000 | 3.5% | $175.00 |
| $40,000 to $75,000 | $35,000 | 5.525% | $1,933.75 |
| $75,000 to $85,000 | $10,000 | 6.37% | $637.00 |
| New Jersey tax | $85,000 | 3.87% overall | $3,288.25 |
The same $85,000 on a joint return (Table B) is $85,000 × 5.525% − $2,775 = $1,921.25, because the joint schedule holds the low rates to $80,000.
Property tax relief, outside the return
| Program | 2025 benefit year (paid 2026–2027) | 2026 benefit year (paid 2027–2028) |
|---|---|---|
| ANCHOR, homeowner, income $150,000 or less / $150,001 to $250,000 | $1,500 / $1,000 | to come |
| ANCHOR, renter, income $150,000 or less, 64 or younger / 65 or older | $450 / $700 | to come |
| Senior Freeze income limit (65 or older or disabled; in the home since December 31, 2022) | $172,475 (2025 income); $168,268 (2024) | to come |
| Stay NJ maximum, 65 or older, income $100,000 or less / to $150,000 / to $200,000 | $6,500 / $5,000 / $4,000 (50% of the bill) | to come |
| Stay NJ income limit | $200,000 (was $500,000) | to come |
| Application deadline | November 2, 2026 | to come (fall 2027) |
All three depend on each year’s budget. The Division’s 2025 ANCHOR page shows the $250 senior add-on for renters only; whether homeowners 65 and older get it this year is a reviewer question (verify). ANCHOR uses Line 29 gross income, which leaves out Social Security; Senior Freeze and Stay NJ count it.
Beyond the income tax
| Item | 2026 |
|---|---|
| Inheritance tax, Class A (spouse, children, grandchildren, parents) and Class E (charities) | None |
| Inheritance tax, Class C (siblings, sons- and daughters-in-law) | First $25,000 exempt, then 11% to 16% |
| Inheritance tax, Class D (everyone else: nieces, nephews, friends, unmarried partners) | 15% on the first $700,000, 16% above |
| Estate tax | None for deaths after December 31, 2017 |
| Realty transfer fee on sales over $1,000,000 | 1% to 3.5% of the price, paid by the seller since July 10, 2025 |
| State sales tax | 6.625%; no general local add-on; clothing, most groceries and prescriptions exempt |
| Reciprocal state for wages | Pennsylvania only (Form NJ-165); Philadelphia wage tax is not covered |
| Capital gains rate | Ordinary rates, 1.4% to 10.75%; no loss carryforward; principal residence exclusion follows federal $250,000 / $500,000 |
The dates
| Date | What |
|---|---|
| Friday, January 15, 2027 | Fourth 2026 estimated payment (NJ-1040-ES); not needed if the return is filed and paid in full by February 15, 2027 |
| Thursday, April 15, 2027 | NJ-1040 and payment due; extension request (NJ-630) and the 80% payment due; first 2027 estimated payment |
| Tuesday, June 15, 2027 | Second 2027 estimated payment |
| Wednesday, September 15, 2027 | Third 2027 estimated payment |
| Friday, October 15, 2027 | Extended due date, valid only if 80% of the tax was paid by April 15 |
Estimates are required when New Jersey tax after withholding and credits will exceed $400; the safe harbor is the smaller of 80% of this year’s tax or 100% of last year’s. Details in New Jersey calendar and forms.
What changed from 2025
- Child Tax Credit up 25% for 2026, 2027 and 2028: $1,250 / $1,000 / $750 / $500 / $250 by tier, from $1,000 / $800 / $600 / $400 / $200 (P.L.2026, c.26).
- Stay NJ cut: income limit $200,000 instead of $500,000; maximum $6,500 only at income of $100,000 or less, then $5,000 and $4,000 (fiscal 2027 Appropriations Act, June 30, 2026).
- Qualified small business stock gain excluded to the extent excluded federally under section 1202, for tax years beginning in 2026 (P.L.2025, c.67).
- Alternative Business Calculation Adjustment reduced to 25% above $500,000 of gross income and to zero at $1,000,000 (budget bill A5323).
- Senior Freeze income limit $172,475 for 2025 income, from $168,268.
- Unchanged: rates, brackets, exemptions, the pension exclusion, the $15,000 property tax deduction, the $50 credit, the 40% NJEITC, the college deductions, the $400 estimated-tax threshold and the 80% rules. None of the 2025 federal deductions reach the return.
Behind the scenes: why the numbers never move
Nothing in the Gross Income Tax Act is indexed to inflation. The $20,000 first bracket, the $1,000 exemption and the $1,500 dependent exemption are the figures the Legislature last wrote down, and they stay until it writes new ones; the brackets were last changed in 2020, when the 10.75% rate was extended down to $1 million. Taxpayers get a quiet tax increase every year as wages rise through fixed brackets, and relief comes in lumps, through credits and property tax programs set in each June’s budget. That is why the figures here split into two kinds: the ones on the NJ-1040, stable and confirmed, and the ones paid outside it, decided a year at a time.
What to bring
- Last year’s NJ-1040, for a line-by-line comparison and the 100% safe harbor
- Birth dates for everyone on the return: the $1,000 exemption at 65, the pension exclusion at 62, the child credit at 5
- Form 1099-R and the pension’s contribution history, for the three-year rule or general rule on previously taxed contributions
- Property tax bills or rent paid in 2026, with the landlord’s address
- Medical bills, insurance premiums paid after tax, and self-employed health insurance, for the 2% deduction
- NJBEST, New Jersey tuition and NJCLASS statements
- The ANCHOR, Senior Freeze and Stay NJ letters, so the benefit payments can be checked against the application
Questions people ask
What are the New Jersey tax brackets for 2026?
Single: 1.4% to $20,000, 1.75% to $35,000, 3.5% to $40,000, 5.525% to $75,000, 6.37% to $500,000, 8.97% to $1,000,000, 10.75% above. Joint and head of household: 1.4% to $20,000, 1.75% to $50,000, 2.45% to $70,000, 3.5% to $80,000, 5.525% to $150,000, 6.37% to $500,000, 8.97% to $1,000,000, 10.75% above. Same as 2025.
What is the New Jersey standard deduction?
There is none. New Jersey allows $1,000 exemptions per person, $1,500 per dependent, and a short list of its own deductions: property tax up to $15,000, medical over 2% of income, alimony paid, and the three college deductions.
How much pension income is tax-free in New Jersey?
Up to $100,000 on a joint return or $75,000 single if you are 62 or older and total income is $100,000 or less; a percentage of the pension at $100,001 to $150,000; nothing at $150,001 or more. Social Security is never taxed and does not count toward the $150,000.
What is the New Jersey Child Tax Credit for 2026?
$1,250 per child 5 or younger at taxable income of $30,000 or less, then $1,000, $750, $500 and $250 by tier up to $80,000, for 2026 through 2028. See Credits and breaks for New Jersey families.
Does New Jersey have an estate tax?
No, not since 2018. It has an inheritance tax by beneficiary class: nothing for a spouse, children, grandchildren or parents; 11% to 16% after $25,000 for siblings and in-laws; 15% to 16% for everyone else.
Fixed brackets, fixed exemptions, a few lines that moved
Check the child credit tier and the pension exclusion cliff; everything else on the NJ-1040 is where it was.
Written by Charles Trautman, EA, editor · Need to Know Tax, Lone Tree, Colorado
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Forms and official pages named in this article
- Form NJ-1040-ES instructions, 2026: rate schedules, exemptions, estimated tax rules
- Form NJ-1040 instructions, 2025 return: the pension exclusion, Worksheet F, filing threshold
- Property Tax Deduction or Credit, including Form NJ-1040-HW
- New Jersey Child Tax Credit (2025 amounts)
- S4531, Child Tax Credit increase for 2026–2028 (P.L.2026, c.26)
- NJEITC: do you qualify, 2025 maximums
- Shared Responsibility Payment, 2026 amounts
- Estimated Tax Notice: the 80% / 100% / 110% safe harbor
Sources and where to check
- Division of Taxation: 2025 Tax Update presentation (credits, property tax relief, QSBS, federal act)
- ANCHOR: how benefits are calculated, 2025 benefit year
- Senior Freeze eligibility, 2025 application
- Treasury Explains: Stay NJ
- Treasury news release: 2026 PAS-1 filing season, November 2 deadline
- EY Tax News: New Jersey budget bills signed June 30, 2026 (secondary)
- Division of Taxation: federal act and New Jersey income tax (December 1, 2025)