Nj Income Tax Rate In 2023
The state of New Jersey has a progressive income tax rate system with six different tax brackets. As of 2023, the income tax rate for NJ residents ranges from 1.4 percent to 8.97 percent, depending on the amount of income earned. The amount of income subject to tax for each bracket is also determined based on filing status. For single filers, the tax rate for incomes up to $20,000 is 1.4 percent, while those with incomes between $20,000 and $35,000 will pay a rate of 3.5 percent. For incomes between $35,000 and $40,000, the rate is 5.525, while incomes between $40,000 and $75,000 are taxed at 6.37 percent.
The tax rate increases to 6.45 percent for incomes between $75,000 and $500,000. For incomes over $500,000, the highest tax rate of 8.97 percent is applied. For married couples filing jointly, the tax rate for incomes up to $20,000 is 1.4 percent, while those with incomes between $20,000 and $40,000 will pay a rate of 3.5 percent. For incomes between $40,000 and $70,000, the rate is 5.525, while incomes between $70,000 and $150,000 are taxed at 6.37 percent.
The tax rate increases to 6.45 percent for incomes between $150,000 and $500,000. For incomes over $500,000, the highest tax rate of 8.97 percent is applied. In addition to the income tax rate, New Jersey residents must also pay a surtax of 5 percent on the first $20,000 of taxable income. This surtax is in addition to the income tax rate and is imposed on all residents regardless of filing status. This surtax is also applied to the first $20,000 of taxable income for married couples filing jointly.
NJ Local Income Tax Rates
In addition to the state income tax, some local jurisdictions in New Jersey impose local income taxes. These taxes vary from jurisdiction to jurisdiction and are imposed on top of the state income tax rate. For example, in Atlantic City, the local income tax rate is 1.25 percent, while in Jersey City, the rate is 1.5 percent. In some instances, the local income tax rate is lower than the state income tax rate for certain income brackets. For example, in Jersey City, the local income tax rate for incomes up to $20,000 is 1.25 percent, while the state income tax rate is 1.4 percent.
NJ Sales Tax Rates
New Jersey has a sales tax rate of 6.625 percent. This rate is applied to the sale of tangible personal property, as well as certain services related to the sale of tangible personal property. In addition to the statewide sales tax rate, some local jurisdictions impose local sales taxes. For example, in Jersey City, the local sales tax rate is 1.5 percent, while in Atlantic City, the local rate is 2 percent.
NJ Property Tax Rates
The state of New Jersey has an average property tax rate of 2.43 percent. However, this rate can vary significantly from one jurisdiction to another. For example, in Atlantic City, the average property tax rate is 3.56 percent, while in Jersey City, the rate is 4.25 percent. Property taxes are imposed on all real estate, as well as personal property, such as vehicles and boats. Property taxes are used to fund local schools, police and fire departments, and other local services.
NJ Inheritance Tax Rate
New Jersey does not have an inheritance or estate tax. However, the state does have a gift tax. The gift tax rate is based on the amount of the gift and the relationship of the recipient to the donor. For example, gifts of up to $14,000 are not subject to the tax, while gifts of more than $14,000 are subject to a tax rate of 11 percent. For gifts of more than $1 million, the tax rate increases to 16 percent.
NJ Tax Credits and Deductions
In addition to the income tax rate, New Jersey residents may be eligible for certain tax credits and deductions. For example, the state offers a homestead rebate for eligible homeowners. The rebate is based on the property tax or rent paid during the tax year and is available to those with incomes up to $150,000. Additionally, the state offers a tax credit for certain businesses that hire veterans and disabled individuals. The credit is equal to 10 percent of the wages paid to the employee and is available for up to 5 years.
NJ Tax Refunds
Taxpayers who have overpaid their state income tax may be eligible for a refund. The refund amount is based on the amount of the overpayment, as well as other factors such as filing status and deductions. Taxpayers who are eligible for a refund may claim the refund by filing a state income tax return. The refund may be claimed as a lump sum or as a credit against future taxes.
Conclusion
The state of New Jersey imposes a progressive income tax, as well as a sales tax and property tax. In addition, certain local jurisdictions impose local income and sales taxes. New Jersey does not have an inheritance or estate tax, but does have a gift tax. Taxpayers may also be eligible for certain tax credits and deductions, as well as refunds for overpaid state income taxes.