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 pensions and annuities from gross income, with specific exclusions noted in N.J.S.54A:6-10. Additionally, employer contributions to various retirement plans, including qualified cash or deferred arrangements, pension plans, annuity plans, and deferred compensation plans, will not be included in gross income. The bill also allows for tax-free rollovers from traditional IRAs to Roth IRAs, simplifying the tax treatment of retirement savings.

Moreover, the bill removes previous language that taxed amounts distributed or withdrawn from employee trusts related to contributions excluded from gross income. 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 encourage retirement savings by reducing tax burdens on a wider range of taxpayers, ultimately enhancing financial security for New Jersey residents as they prepare for retirement.

Statutes affected:
Introduced: 54A:6-21