State retirement taxes · 2026
Does New Jersey tax retirement income?
Short answer: Partly. New Jersey does not tax Social Security benefits. At 62+, up to $100,000 ($75,000 single) of pension and IRA income is excluded — if income is $150,000 or less.
What’s taxed in New Jersey
2026 rules.
- Social SecurityNot taxed
- New Jersey does not tax Social Security benefits.
- PensionsPartly taxed
- At 62+, up to $100,000 of pension and IRA income is excluded ($75,000 single) — but only if total income is $150,000 or less.
- IRA & 401(k) withdrawalsPartly taxed
- IRA and 401(k) withdrawals qualify for the same 62+ exclusion and the same $150,000 income cliff.
- Military retirement payNot taxed
- U.S. military pensions and survivor benefit payments are fully exempt; honorably discharged veterans also get a $6,000 exemption.
- Income tax rate10.75% top
- Graduated rates from 1.4% to 10.75%.
Does New Jersey tax Social Security?
New Jersey does not tax Social Security benefits.
Federal Social Security and Railroad Retirement (Tier 1 and Tier 2) are exempt, with no income limit.
Your federal return is a separate question — see how much of your benefit the IRS taxes with the taxable Social Security calculator.
Are pensions taxed in New Jersey?
At 62+, up to $100,000 of pension and IRA income is excluded ($75,000 single) — but only if total income is $150,000 or less.
To use the pension/retirement exclusion you must be 62+ (or blind or disabled) and have New Jersey gross income of $150,000 or less. With income up to $100,000 you can exclude up to $100,000 (joint), $75,000 (single, head of household or surviving spouse) or $50,000 (separate). From $100,001 to $125,000 the exclusion is 50% / 37.5% / 25% of pension income; from $125,001 to $150,000 it’s 25% / 18.75% / 12.5%. Above $150,000 there is no exclusion at all. On a joint return only the 62+ spouse’s pension counts. Unused exclusion can cover other income if your wages and business income total $3,000 or less. If you were never eligible for Social Security or Railroad Retirement, a special $6,000 ($3,000 single) exclusion applies.
Public vs. private pensions: Same exclusion for both.
Are IRA and 401(k) withdrawals taxed in New Jersey?
IRA and 401(k) withdrawals qualify for the same 62+ exclusion and the same $150,000 income cliff.
New Jersey also lets you recover contributions you already paid New Jersey tax on, under its own basis rules.
Required minimum distributions (RMDs) are IRA and 401(k) withdrawals, so the same rules apply. Estimate your RMD.
Is military retirement pay taxed in New Jersey?
U.S. military pensions and survivor benefit payments are fully exempt; honorably discharged veterans also get a $6,000 exemption.
What is New Jersey’s income tax rate?
8 brackets, topping out at 10.75%.
Graduated rates from 1.4% to 10.75%. Single filers pay 6.37% from $75,000 to $500,000; joint filers reach 6.37% at $150,000. The 10.75% rate applies above $1 million.
2026 brackets. Each rate applies to taxable income above the amount shown.
| Single | Married, joint | Rate |
|---|---|---|
| $0 | $0 | 1.4% |
| $20,000 | $20,000 | 1.75% |
| — | $50,000 | 2.45% |
| $35,000 | $70,000 | 3.5% |
| $40,000 | $80,000 | 5.525% |
| $75,000 | $150,000 | 6.37% |
| $500,000 | $500,000 | 8.97% |
| $1,000,000 | $1,000,000 | 10.75% |
Single filers have no 2.45% bracket. Head of household and surviving spouse use the joint table.
Standard deduction and exemptions
No standard deduction. Personal exemptions: $1,000 each for you and your spouse, plus $1,000 if 65+, $1,000 if blind or disabled and $6,000 for veterans. Filing threshold: $20,000 joint or head of household, $10,000 single or separate.
What tax breaks do seniors get in New Jersey?
The extra $1,000 exemption at 65+, the pension and other-retirement-income exclusions at 62+, and the property tax credit or deduction for homeowners and tenants 65+ or disabled. ANCHOR, Senior Freeze and Stay NJ are separate property-tax programs.
What changed for 2026?
We found no enacted change to rates or the retirement exclusion for 2026, including in the FY2027 budget signed June 30, 2026. Bills to remove or soften the $150,000 cliff were introduced but not enacted.
Rates and exclusions are set in law and not indexed; facts from the 2025 NJ-1040 instructions. No 2026 change found.
How New Jersey compares with its neighbors
Thinking of moving across the line? Here’s how each bordering state treats retirement income in 2026.
- New JerseyThis pageFriendlySocial Security Not taxedTop rate: 10.75% top
- DelawareFriendlySocial Security Not taxedTop rate: 6.6% top
- New YorkVery friendlySocial Security Not taxedTop rate: 10.9% top
- PennsylvaniaVery friendlySocial Security Not taxedTop rate: 3.07% flat
State tax is half the picture — check the federal side
New Jersey retirement tax questions
Is New Jersey tax-friendly for retirees?
We rate New Jersey “Friendly” for 2026. New Jersey does not tax Social Security benefits. At 62+, up to $100,000 ($75,000 single) of pension and IRA income is excluded — if income is $150,000 or less. The top income tax rate is 10.75%.
Are required minimum distributions (RMDs) taxed in New Jersey?
RMDs are withdrawals from IRAs and 401(k)-type plans, so they follow New Jersey’s rules for those accounts. IRA and 401(k) withdrawals qualify for the same 62+ exclusion and the same $150,000 income cliff.
Is military retirement pay taxed in New Jersey?
No. U.S. military pensions and survivor benefit payments are fully exempt; honorably discharged veterans also get a $6,000 exemption.
What is New Jersey’s $150,000 retirement income cliff?
The pension and IRA exclusion at 62+ is only available if your New Jersey gross income is $150,000 or less. It is full up to $100,000 of income, shrinks to a percentage of pension income between $100,001 and $150,000, and disappears entirely above $150,000 — even by one dollar.
Sources for New Jersey
Primary sources only. We re-check them whenever an agency publishes new figures.
- State
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