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 included in gross income, but will be taxed upon distribution from the account.

The bill introduces new legal language that specifies the types of contributions that are excluded from gross income, including those made by employers on behalf of employees and contributions to various retirement plans. It also clarifies that the taxable portion of distributions from these plans will be determined using the same method as outlined in the federal Internal Revenue Code. The provisions of this act will take effect immediately and apply to contributions made or premiums paid in taxable years beginning on or after January 1 following the enactment.

Statutes affected:
Introduced: 54A:6-21