This bill amends the New Jersey gross income tax law to increase the tax deduction available to veterans from $6,000 to $9,000. It specifically applies to veterans who have been honorably discharged or released under honorable circumstances from active duty in the Armed Forces, a reserve component, or the National Guard of New Jersey in federal active duty status. In addition to the increase, the bill introduces a provision to index the deduction for inflation starting in tax year 2027, adjusting the amount annually based on the percentage increase in the Chained Consumer Price Index for all Urban Consumers (C-CPI-U).

The bill aims to provide greater financial relief to veterans by enhancing their tax benefits, thereby recognizing their service. The adjustment for inflation ensures that the value of the deduction will not diminish over time, maintaining its effectiveness in providing support to veterans as living costs change. The new provisions will take effect immediately and apply to taxable years beginning on or after January 1, 2026.