This bill amends N.J.S.54A:6-7 to provide a gross income tax exclusion for military compensation received by New Jersey residents who are serving in the Armed Forces outside of the state. Specifically, it allows for the exclusion of compensation for individuals who are either not domiciled in New Jersey or those who are domiciled in the state but stationed or deployed outside of New Jersey for at least six months during the taxable year.

The bill also clarifies that mustering-out payments and housing and subsistence allowances received by active and reserve military members, as well as New Jersey National Guard members on state active duty, are exempt from gross income tax. This legislation is intended to support military personnel by alleviating their tax burden while they serve away from their home state. The act will take effect immediately and apply to taxable years beginning after its enactment.