This bill amends New Jersey's gross income tax law to exclude contributions made to specific retirement savings plans from gross income. The types of plans affected include those established under sections 401(a) and 401(k) of the federal Internal Revenue Code, annuity contracts under section 403(b), deferred compensation plans under section 457, the federal Thrift Savings Fund, and standard Individual Retirement Accounts (IRAs) under section 408. The contributions to these plans will not be taxed as gross income but will be taxed upon distribution from the account.

The bill introduces new legal language that specifies the types of contributions that qualify for this exclusion, including employer contributions to qualified cash or deferred arrangements, contributions to pension plans, and premiums for annuity contracts. It also clarifies that the exclusion applies to contributions made or premiums paid in taxable years beginning on or after January 1 of the year following the bill's enactment. This change aims to provide tax relief to individuals saving for retirement by aligning state tax treatment with federal tax benefits.

Statutes affected:
Introduced: 54A:6-21