The bill amends New Jersey's gross income tax law to provide tax relief for individuals saving for retirement by excluding certain contributions, withdrawals, and rollovers from gross income tax. It introduces new language stating that gross income shall not include pensions and annuities, with specific exclusions outlined in N.J.S.54A:6-10. Additionally, amounts contributed by employers to various retirement plans, including qualified pension plans, annuity plans, and deferred compensation plans, will also be exempt from gross income. This change aims to simplify the tax treatment of retirement savings and encourage individuals to save for their future.

Moreover, the bill removes previous language that included amounts distributed or withdrawn from employee trusts attributable to contributions excluded from gross income, thereby streamlining the tax code. It also defines "qualified withdrawal" as a withdrawal from specified retirement accounts that complies with federal regulations without incurring penalties or additional taxes. By broadening the scope of exclusions from gross income, the bill seeks to enhance financial security for New Jersey taxpayers as they approach retirement, with the act set to take effect immediately for taxable years beginning on or after January 1 following its enactment.

Statutes affected:
Introduced: 54A:6-21