The bill amends New Jersey's gross income tax law to provide tax relief for retirement savings by excluding certain contributions, withdrawals, and rollovers from gross income tax. It introduces new provisions that exempt employer contributions to various retirement plans, including qualified cash or deferred arrangements, pension plans, annuity plans, eligible deferred compensation plans, federal Thrift Savings Funds, and individual retirement accounts (IRAs). Additionally, the bill clarifies that pensions and annuities are excluded from gross income, with specific exceptions noted in existing law.

Moreover, the bill removes previous language that included amounts distributed or withdrawn from employee trusts and certain IRA rollovers in the gross income calculation. 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. This adjustment aims to enhance financial security for New Jersey taxpayers as they prepare for retirement, encouraging savings and reducing tax burdens on retirement income. The act is set to take effect immediately and will apply to taxable years starting on or after January 1 following its enactment.

Statutes affected:
Introduced: 54A:6-21