This bill amends N.J.S.54A:6-10 and N.J.S.54A:6-15 to expand eligibility for the pension and retirement income exclusion to taxpayers with gross incomes exceeding $150,000. Previously, only those with incomes of $150,000 or less could qualify for this exclusion. The new provisions allow qualifying taxpayers to claim a full or partial exclusion regardless of their income level, thereby broadening access to this tax benefit. Additionally, the bill increases the amount of the exclusion, permitting taxpayers to exempt the first $150,000 of pension payments and other retirement income, as well as 50 percent of any payments exceeding $150,000 up to $300,000 during a taxable year.

The bill also specifies that for taxable years beginning on or after January 1, 2021, the exclusion will only be available to taxpayers with gross incomes not exceeding $150,000. This change is significant as it allows for a more inclusive approach to retirement income taxation, ensuring that a wider range of taxpayers can benefit from the exclusion. However, it maintains a cap on the exclusion, stating that no exemption can be claimed for payments exceeding $300,000. Overall, the bill aims to provide greater financial relief to retirees and those receiving pension income, particularly as they navigate their financial obligations in retirement.

Statutes affected:
Introduced: 54A:6-15