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 provisions that specify that gross income shall not include amounts contributed by employers to qualified retirement plans, such as cash or deferred arrangements, pension plans, annuity plans, and individual retirement accounts that meet federal requirements. Additionally, the bill clarifies that pensions and annuities are generally excluded from gross income, with certain exceptions outlined in existing law.

Moreover, the bill removes previous language that included amounts distributed from employee trusts that were attributable to contributions excluded from gross income, simplifying the tax treatment of retirement savings. It also raises the gross income limit for taxpayers to qualify for these exclusions from $100,000 to $150,000 for taxable years beginning on or after January 1, 2021, and introduces partial exclusions for those with gross incomes between $100,000 and $150,000. These changes aim to encourage retirement savings and enhance financial security for New Jersey taxpayers as they approach retirement.

Statutes affected:
Introduced: 54A:6-21