N.J. Stat. tit. 54A, ch. 6

N.J. Stat. tit. 54A, ch. 6
in effect

N.J. Stat. § 54A:6-1 Items in 54A:6-2 to 54A:6-9 excluded

The items in sections 54A:6-2 to 54A:6-9, inclusive, shall be specifically excluded from gross income. L.1976, c. 47, s. 54A:6-1, eff. July 8, 1976, operative Aug. 30, 1976.

N.J. Stat. § 54A:6-2 Federal social security benefits

All payments received under the Federal Social Security Act, whether they be regularly monthly benefits or lump sum death benefits. L.1976, c. 47, s. 54A:6-2, eff. July 8, 1976, operative Aug. 30, 1976.

N.J. Stat. § 54A:6-3 Railroad retirement benefits

All payments received under the Railroad Retirement Act administered by the Federal Government. L.1976, c. 47, s. 54A:6-3, eff. July 8, 1976, operative Aug. 30, 1976.

N.J. Stat. § 54A:6-4 Certain death benefits

a. Proceeds of life insurance contracts payable by reason of death. b. Employees' death benefits, if such amounts are paid by or on behalf of an employer and are paid by reason of the death of the employee. L.1976, c. 47, s. 54A:6-4, eff. July 8, 1976, operative Aug. 30, 1976.

N.J. Stat. § 54A:6-5 Gifts and inheritances

a. The value of property acquired by gift, bequest, devise or inheritance. b. Income. Subsection a. shall not exclude from gross income: 1. The income from any property referred to in subsection a. 2. Where the gift, bequest, devise or inheritance is of income from property, the amount of such income. L.1976, c. 47, s. 54A:6-5, eff. July 8, 1976, operative Aug. 30, 1976.

N.J. Stat. § 54A:6-6 Compensation for injuries or sickness

a. Amounts received under workmen's compensation acts as compensation for personal injuries or sickness. b. The amount of damages received, whether by suit or agreement, on account of personal injuries or sickness. c. Amounts received through accident or health insurance for personal injuries or sickness. d. Amounts received as a pension, annuity or similar allowance for personal injuries or sickness resulting from active service in the Armed Forces of the United States or in the Coast and Geodetic Survey or the Public Health Service, or as a disability annuity payable under the Foreign Service Act of 1946. L.1976, c. 47, s. 54A:6-6, eff. July 8, 1976, operative Aug. 30, 1976.

N.J. Stat. § 54A:6-7 Certain pay of members of the armed forces, NJNG, exemption from taxable gross income.

54A:6-7. a. Compensation paid by the United States for service in the Armed Forces of the United States performed by an individual not domiciled in this State. b. Amounts received during the taxable year as mustering-out payments with respect to service in the Armed Forces of the United States. c. Amounts received during the taxable year as housing and subsistence allowances by members of the active and reserve components of the Armed Forces of the United States, and by New Jersey National Guard members while on State active duty. L.1976, c.47, s. 54A:6-7; amended 2005, c.63.

N.J. Stat. § 54A:6-8 Scholarships and fellowship grants

a. Any amount received as a scholarship at an educational institution. b. Any amount received as a fellowship grant. c. Any amount received to cover expenses for travel, research or equipment which are incident to a scholarship or research grant, but only to the extent that the amount is so expended by the recipient. L.1976, c. 47, s. 54A:6-8, eff. July 8, 1976, operative Aug. 30, 1976.

N.J. Stat. § 54A:6-9.1 Gains from sale, exchange of principal residence, excludable from gross income; conditions

1. a. The gain realized from the sale or exchange of property by a taxpayer shall be excludable from the gross income of the taxpayer at the election of the taxpayer, which shall be in conformity with the election of the taxpayer made for federal income tax purposes pursuant to section 121 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.121, if, during the five-year period ending on the date of the sale or exchange, that property has been owned and used by the taxpayer as the taxpayer's principal residence for periods aggregating two years or more. b. The amount of gain excludable from gross income under subsection a. of this section with respect to any sale or exchange shall not exceed: (1) $250,000; or (2) $500,000, in the case of a husband and wife filing jointly for the taxable year of the sale or exchange of the property, if: (i) either spouse meets the ownership requirements of subsection a. with respect to the property; (ii) both spouses meet use requirements of subsection a. of this section with respect to the property; and (iii) neither spouse is ineligible for the exclusion provided in subsection a. of this section with respect to the property by reason of the limitations of subsection c. of this section. c. The exclusion provided in subsection a. shall not apply to any sale or exchange by the taxpayer if, during the two-year period ending on the date of sale or exchange, there was another sale or exchange after May 6, 1997 by the taxpayer to which an election made pursuant to subsection a. applied, except that this limitation shall not prevent a husband and wife filing jointly from each excluding up to $250,000 of gain from the sale or exchange of each spouse's principal residence provided that each spouse would be allowed to exclude up to $250,000 of gain if each spouse had filed separately. d. If a sale or exchange to which this section would apply but for the failure to meet the aggregate two-year period of ownership and use by the taxpayer as the taxpayer's principal residence during the five-year period ending on the date of the sale or exchange, and the sale or exchange is by reason of a change in place of employment, health, or unforeseen circumstances, to the extent provided for a similar exemption for federal income tax purposes pursuant to section 121 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.121, then notwithstanding the amount of excludable gain allowed under subsection b. of this section, the amount of gain excludable from gross income with respect to such sale or exchange shall not exceed the amount which bears the same ratio to the amount which would be so excluded under this section if such requirements had been met as the shorter of (1) the aggregate periods, during the five-year period ending on the date of such sale or exchange, the property has been owned and used by the taxpayer as the taxpayer's principal residence, or (2) the period after the date of the most recent prior sale or exchange by the taxpayer to which subsection a. of this section applied and before the date of such sale or exchange bears to two years. e. (1) An exclusion allowed pursuant to this section shall be available if a husband and wife file jointly for the taxable year of the sale or exchange and either spouse meets the ownership and use requirements of subsection a. of this section with respect to the property. (2) For the purposes of this section, in the case of an unmarried individual whose spouse is deceased on the date of sale or exchange of property, the period the unmarried individual owned and used the property shall include the period the deceased spouse owned and used the property before the deceased spouse's death. (3) For the purposes of this section, in the case of an individual holding property transferred to the individual in a transaction described in subsection (a) of section 1041 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1041, the period the individual owns the property shall include the period the transferor owned the property. An individual shall be treated as using the property as the individual's principal residence during any period of ownership while the individual's spouse or former spouse is granted use of the property under a divorce or separation instrument as defined in paragraph (2) of subsection (b) of section 71 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.71. f. The provisions of this section shall apply with respect to qualified tenant-shareholders in cooperatives. g. The exclusion of gain allowed pursuant to this section shall not apply to so much of the gain from the sale of any property as does not exceed the portion of the depreciation adjustments (as deemed in paragraph (3) of subsection (b) of section 1250 of the federal Internal Revenue Code of 1986) attributable to periods after May 6, 1997, in respect of that property. h. For the purposes of this section, the destruction, theft, seizure, requisition, or condemnation of property shall be treated as the sale of the property. i. In the case of a taxpayer who (1) becomes physically or mentally incapable of self-care, and (2) owns property and uses that property as the taxpayer's principal residence for periods aggregating at least one year during the five-year period described in subsection a. of this section; that taxpayer shall be treated as using that property as the taxpayer's principal residence during any time during such five-year period in which the taxpayer owns the property and resides in any facility (including a nursing home) licensed by the State or political subdivision to care for an individual in the taxpayer's condition. j. At the election of the taxpayer, the exclusion provided pursuant to this section shall apply to the sale or exchange of an interest in a principal residence by reason of that interest being a remainder interest in that residence, but this section shall not apply to any other interest in such residence which is sold or exchanged separately. However, this subsection shall not apply to any sale to, or exchange with, any person who bears a relationship to the taxpayer which is described in subsection (b) of section 267 or subsection (b) of section 707 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.267 or 26 U.S.C. s.707. k. This section shall not apply to any sale or exchange by an individual if the treatment provided by paragraph (1) of subsection (a) of section 877 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.877, applies to that individual for federal income tax purposes. l. In the case of property the acquisition of which by the taxpayer resulted under N.J.S.54A:6-9 in the exclusion of any part of the gain realized on the sale or exchange of another residence, there shall be included in determining the period for which the taxpayer has owned and used such property as the taxpayer's personal residence, the aggregate periods for which such other residence had been so owned and used. L.1998, c.3, s.1.

N.J. Stat. § 54A:6-9.2 Applicability of federal "Taxpayer Relief Act of 1997"

3. a. Notwithstanding the provisions of any law to the contrary, a taxpayer who elects to apply the provisions of paragraph (2) or (4) of subsection (d) of section 312 of the federal "Taxpayer Relief Act of 1997" (Pub. L.105-34), for federal income tax purposes shall be subject to the same provisions for New Jersey gross income tax purposes. b. Notwithstanding the provision of any law to the contrary, the exclusion of gain realized from the sale or exchange of property by a taxpayer that has been owned and used by the taxpayer as the taxpayer's principal residence shall be excludable from the gross income of the taxpayer, upon the election of the taxpayer made pursuant to paragraph (3) of subsection (d) of section 312 of the federal "Taxpayer Relief Act of 1997" (Pub. L.105-34), for federal income tax purposes, and shall be determined pursuant to the proration method allowed pursuant to subsection d. of section 1 of P.L.1998, c.3 (C.54A:6-9.1), notwithstanding that the sale or exchange is not by reason of a change in place of employment, health, or unforeseen circumstances, and notwithstanding that the taxpayer does not meet the use and ownership requirement for periods aggregating two years, if the sale or exchange takes place during the two-year period beginning on August 5, 1997 and the taxpayer held the property on August 5, 1997. L.1998, c.3, s.3.

N.J. Stat. § 54A:6-10 Pensions and annuities.

54A:6-10. Pensions and annuities. a. Gross income shall not include that part of any amount received as an annuity under an annuity, endowment, or life insurance contract which bears the same ratio to such amount as the investment in the contract as of the annuity starting date bears to the expected return under the contract as of such date. Where (1) part of the consideration for an annuity, endowment, or life insurance contract is contributed by the employer, and (2) during the three-year period beginning on the date on which an amount is first received under the contract as an annuity, the aggregate amount receivable by the employee under the terms of the contract is equal to or greater than the consideration for the contract contributed by the employee, then all amounts received as an annuity under the contract shall be excluded from gross income until there has been so excluded an amount equal to the consideration for the contract contributed by the employee. b. (1) In addition to that part of any amount received as an annuity which is excludable from gross income as herein provided, gross income shall not include payments: for taxable years beginning before January 1, 2000, of up to $10,000 for a married couple filing jointly, $5,000 for a married person filing separately, or $7,500 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for the taxable year beginning on or after January 1, 2000, but before January 1, 2001, of up to $12,500 for a married couple filing jointly, $6,250 for a married person filing separately, or $9,375 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for the taxable year beginning on or after January 1, 2001, but before January 1, 2002, of up to $15,000 for a married couple filing jointly, $7,500 for a married person filing separately, or $11,250 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for the taxable year beginning on or after January 1, 2002, but before January 1, 2003, of up to $17,500 for a married couple filing jointly, $8,750 for a married person filing separately, or $13,125 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2003, but before January 1, 2017 of up to $20,000 for a married couple filing jointly, $10,000 for a married person filing separately, or $15,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2017, but before January 1, 2018, of up to $40,000 for a married couple filing jointly, $20,000 for a married person filing separately, or $30,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2018, but before January 1, 2019, of up to $60,000 for a married couple filing jointly, $30,000 for a married person filing separately, or $45,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2019, but before January 1, 2020, of up to $80,000 for a married couple filing jointly, $40,000 for a married person filing separately, or $60,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2020, of up to $100,000 for a married couple filing jointly, $50,000 for a married person filing separately, or $75,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2021, for a taxpayer with gross income in excess of $100,000, but not more than $125,000, 50 percent of payments for a married couple filing jointly, 25 percent of payments for a married couple filing separately, or 37.5 percent of payments for an individual filing as a single taxpayer or individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2021, for a taxpayer with gross income in excess of $125,000, but not more than $150,000, 25 percent of payments for a married couple filing jointly, 12.5 percent of payments for a married couple filing separately, or 18.75 percent of payments for an individual filing as a single taxpayer or individual determining tax pursuant to subsection a. of N.J.S.54A:2-1, which are received as an annuity, endowment or life insurance contract, or payments of any such amounts which are received as pension, disability, or retirement benefits, under any public or private plan, whether the consideration therefor is contributed by the employee or employer or both, by any person who is 62 years of age or older or who, by virtue of disability, is or would be eligible to receive payments under the federal Social Security Act. (2) For taxable years beginning on or after January 1, 2005, but before January 1, 2021, the exclusion provided by this subsection shall only be allowed if the taxpayer has gross income for the taxable year of not more than $100,000. For taxable years beginning on or after January 1, 2021, the exclusion provided by this subsection shall only be allowed if the taxpayer has gross income for the taxable year of not more than $150,000. c. Gross income shall not include any amount received under any public or private plan by reason of a permanent and total disability. d. Gross income shall not include distributions from an employees' trust described in section 401(a) of the Internal Revenue Code of 1986, as amended (hereinafter referred to as "the Code"), which is exempt from tax under section 501(a) of the Code if the distribution, except the portion representing the employees' contributions, is rolled over in accordance with section 402(a)(5) or section 403(a)(4) of the Code. The distribution shall be paid in one or more installments which constitute a lump-sum distribution within the meaning of section 402(e)(4)(A) (determined without reference to subsection (e)(4)(B)), or be on account of a termination of a plan of which the trust is a part or, in the case of a profit-sharing or stock bonus plan, a complete discontinuance of contributions under such plan. Amended 1977, c.40, s.2; 1977, c.273, s.2; 1979, c.79, s.1; 1990, c.61, s.16; 1999, c. 177, s.1; 2005, c.130, s.1; 2016, c.57, s.9; 2021, c.129, s.1.

N.J. Stat. § 54A:6-11 Lottery winnings.

54A:6-11. Lottery Winnings. Gross income shall not include lottery winnings from the New Jersey Lottery, except that New Jersey Lottery winnings from a prize in an amount exceeding $10,000 shall be included in gross income. Amended 2009, c.69, s.3.6.

N.J. Stat. § 54A:6-13 Unemployment insurance benefits

All payments and benefits received under any unemployment insurance law. L.1976, c. 47, s. 54A:6-13, eff. July 8, 1976, operative Aug. 30, 1976.

N.J. Stat. § 54A:6-14 Interest on certain obligations

Gross income shall not include interest on obligations (1) issued by or on behalf of this State or any county, municipality, school or other district, agency, authority, commission, instrumentality, public corporation (including one created or existing pursuant to agreement or compact with this or any other state), body corporate and politic or political subdivision of this State, or (2) those obligations which are statutorily free from State or local taxation under any other act of this State or under the laws of the United States. L.1976, c. 47, s. 54A:6-14, eff. July 8, 1976, operative Aug. 30, 1976.

N.J. Stat. § 54A:6-14.1 Exemption of distributions of qualified investment fund

2. Gross income shall not include distributions paid by a qualified investment fund, to the extent that the distributions are attributable to interest or gain from obligations described in N.J.S.54A:6-14. For the purposes of this act, "qualified investment fund" means any investment company or trust registered with the Securities and Exchange Commission, or any series of such investment company or trust, which for the calendar year in which the distribution is paid: a. Has no investments other than interest-bearing obligations, obligations issued at a discount, and cash and cash items, including receivables, and financial options, futures, forward contracts, or other similar financial instruments related to interest-bearing obligations, obligations issued at a discount or bond indexes related thereto; and b. Has not less than 80% of the aggregate principal amount of all of its investments, excluding financial options, futures, forward contracts, or other similar financial instruments related to interest-bearing obligations, obligations issued at a discount or bond indexes related thereto to the extent such instruments are authorized by section 851(b) of the federal Internal Revenue Code of 1986, 26 U.S.C. s.851(b), cash and cash items, which cash items shall include receivables, in obligations described in N.J.S.54A:6-14. For purposes of this section, "series" means a segregated portfolio of assets, the beneficial interests in which are owned by the holders of a class or series of stock or shares of the investment company or trust that is preferred over all other classes or series in respect to the portfolio of assets. L.1987,c.310,s.2; amended 1992,c.204,s.1.

N.J. Stat. § 54A:6-15 Other retirement income.

3. Other retirement income. a. (1) Gross income shall not include income: for taxable years beginning before January 1, 2000, of up to $10,000 for a married couple filing jointly, $5,000 for a married person filing separately, or $7,500 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for the taxable year beginning on or after January 1, 2000, but before January 1, 2001, of up to $12,500 for a married couple filing jointly, $6,250 for a married person filing separately, or $9,375 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for the taxable year beginning on or after January 1, 2001, but before January 1, 2002, of up to $15,000 for a married couple filing jointly, $7,500 for a married person filing separately, or $11,250 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for the taxable year beginning on or after January 1, 2002, but before January 1, 2003, of up to $17,500 for a married couple filing jointly, $8,750 for a married person filing separately, or $13,125 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2003, but before January 1, 2017, gross income shall not include income of up to $20,000 for a married couple filing jointly, $10,000 for a married person filing separately, or $15,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2017 but before January 1, 2018, gross income shall not include income of up to $40,000 for a married couple filing jointly, $20,000 for a married person filing separately, or $30,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2018, but before January 1, 2019, gross income shall not include income of up to $60,000 for a married couple filing jointly, $30,000 for a married person filing separately, or $45,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2019, but before January 1, 2020, gross income shall not include income of up to $80,000 for a married couple filing jointly, $40,000 for a married person filing separately, or $60,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2020, gross income shall not include income of up to $100,000 for a married couple filing jointly, $50,000 for a married person filing separately, or $75,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2021, for a taxpayer with gross income in excess of $100,000, but not more than $125,000, 50 percent of income for a married couple filing jointly, 25 percent of income for a married couple filing separately, or 37.5 percent of income for an individual filing as a single taxpayer or individual determining tax pursuant to subsection a. of N.J.S.54A:2-1; for taxable years beginning on or after January 1, 2021, for a taxpayer with income in excess of $125,000, but not more than $150,000, 25 percent of gross income for a married couple filing jointly, 12.5 percent of income for a married couple filing separately, or 18.75 percent of income for an individual filing as a single taxpayer or individual determining tax pursuant to subsection a. of N.J.S.54A:2-1, when received in any tax year by a person aged 62 years or older who received no income in excess of $3,000 from one or more of the sources enumerated in subsections a., b., k. and p. of N.J.S.54A:5-1. (2) For taxable years beginning on or after January 1, 2005, but before January 1, 2021, the exclusion provided by this subsection shall only be allowed if the taxpayer has gross income for the taxable year of not more than $100,000. For taxable years beginning on or after January 1, 2021, the exclusion provided by this subsection shall only be allowed if the taxpayer has gross income for the taxable year of not more than $150,000. (3) The total exclusion under this subsection and that allowable under N.J.S.54A:6-10 shall not exceed the amounts of the exclusions set forth in this subsection. b. In addition to the exclusion provided under N.J.S.54A:6-10 and subsection a. of this section, gross income shall not include income of up to $6,000 for a married couple filing jointly or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1, or $3,000 for a single person or a married person filing separately, who is not covered under N.J.S.54A:6-2 or N.J.S.54A:6-3, but who would be eligible in any year to receive payments under either section if he or she were covered thereby. L.1977, c.273, s.3; amended 1990, c.61, s.17; 1993, c.173, s.17; 1999, c.177, s.2; 2005, c.130, s.2; 2016, c.57, s.10; 2021, c.129, s.2.

N.J. Stat. § 54A:6-21 Contributions to certain employee trusts

Gross income shall not include amounts contributed by an employer on behalf of and at the election of an employee to a trust which is part of a qualified cash or deferred arrangement which meets the requirements of Section 401(k) of the 1954 Internal Revenue Code, as amended. L.1983, c. 571, s. 2, eff. Jan. 1, 1984.

N.J. Stat. § 54A:6-22 Gross income exclusion.

2. Gross income shall not include payments and benefits directly received by a taxpayer under homeless persons' assistance programs, including but not limited to assistance in obtaining housing, temporary shelter and short-term financial assistance, as may be established pursuant to subsection h. of section 24 of P.L.1944, c.85 (C.52:27C-24), or benefits, including imputed income, received pursuant to the "Mortgage Stabilization and Relief Act," P.L.2008, c.127 (C.55:14K-82 et al.). L.1988, c.29, s.2; amended 2008, c.127, s.20.

N.J. Stat. § 54A:6-23 Commuter transportation benefits not considered gross income.

1. a. For the purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., "gross income" shall not include employer provided commuter transportation benefits as defined pursuant to section 3 of P.L.1992, c.32 (C.27:26A-3), up to and including the limit per taxable year per employee pursuant to subsection b. of this section. Should an employee receive commuter transportation benefits in excess of those limits in a taxable year, only the amount in excess of those limits shall be included in gross income. If an employee receives money towards commuter transportation benefits from the employee's employer, as an advance, a reimbursement, or both, the employee shall furnish suitable proof to the employer in the form of receipts, ticket stubs or the like that the employee used the employer provided money for alternative means of commuting as defined pursuant to section 3 of P.L.1992, c.32 (C.27:26A-3). b. (1) The limit per taxable year per employee shall be $720 for the taxable years beginning on and after January 1, 1993 but before January 1, 1997. (2) The limit per taxable year per employee shall be $1,000 for the taxable years beginning on and after January 1, 1997 but before January 1, 2002. For taxable years beginning on or after January 1, 1994 but before January 1, 2002, the director shall adjust the limit, rounded down to the nearest $5, in proportion to the change in the average consumer price index for all urban consumers in the New York and Northeastern New Jersey and the Philadelphia areas, as reported by the United States Department of Labor, from calendar year 1993 to the calendar year ending immediately before the taxable year. (3) The limit per taxable year per employee shall be $1,200 for the taxable years beginning on or after January 1, 2002, provided however that in the case of any taxable year beginning in a calendar year after 2002 the director shall adjust the limit for inflation in parallel with the adjustment pursuant to paragraph (6) of subsection (f) of section 132 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.132, so that the taxable year limit pursuant to this paragraph is equal to 12 times the adjusted federal monthly limit pursuant to subparagraph (A) of paragraph (2) of subsection (f) of section 132 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.132. c. The exclusion provided by subsection a. of this section shall not apply to any commuter transportation benefit unless such benefit is provided in addition to and not in lieu of any compensation otherwise payable to the employee. d. Acceptance of the cash value of qualified parking, pursuant to section 132 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.132, on the part of one employee of an employer in place of qualified parking fringe benefits provided to the other employees of the employer in addition to and not in lieu of compensation, shall not cause the qualified parking fringe to become a taxable benefit for employees who do not accept the cash value. L.1993,c.108,s.1; amended 1996, c.121, s.7; 2001, c.162, s.2.

N.J. Stat. § 54A:6-24 Cafeteria plan, qualified option, certain; not gross income

1. Gross income shall not include the value of an employee's qualified option under a cafeteria plan if the employee does not elect to receive cash and the value of the option is excludable from federal taxable income. As used in this section: "Cafeteria plan" means an employee benefit plan that meets the requirements of section 125 of the federal Internal Revenue Code of 1986, 26 U.S.C. s. 125; "Qualified option" means an option to receive cash in lieu of a qualified employer-provided benefit which option may only be exercised if the employee derives a substantially similar benefit from a source other than the employer; "Qualified employer-provided benefit" means a benefit the value of which is excludable from federal taxable income under a cafeteria plan but which is not a benefit provided pursuant to a salary reduction agreement; and "Salary reduction agreement" means an agreement between an employer and an employee under which the employee individually chooses to reduce the employee's compensation, or to forgo increases in compensation, and to have the amount provided, as an employer-provided benefit, by the employer to the employee; including but not limited to the agreements commonly known as flexible spending accounts and premium conversion options. L.1995,c.111.

N.J. Stat. § 54A:6-25 Certain earnings, distributions excluded from gross income.

13. a. Gross income shall not include earnings on a Coverdell education savings account, a qualified tuition program account, or a qualified ABLE account until the earnings are distributed from the account, at which time the amount of the distribution attributable to earnings on the account and the amount of the distribution attributable to contributions allowed as a deduction pursuant to section 3 of P.L.2021, c.128 (C.54A:3-12) shall be includible in the gross income of the distributee except as provided in this section. b. Gross income shall not include qualified distributions as defined in paragraph (3) of subsection c. of this section. c. For purposes of this section: (1) "Coverdell education savings account" means a Coverdell education savings account as defined pursuant to paragraph (1) of subsection (b) of section 530 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.530. (2) "Qualified tuition program account" means an account established pursuant to the "New Jersey Better Educational Savings Trust (NJBEST) Program," (N.J.S.18A:71B-35 et seq.) or an account established pursuant to any qualified tuition program, as defined pursuant to subsection (b) of section 529 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529 or a tuition credit or certificate purchased pursuant to any such program. (3) "Qualified distribution" means any of the following: (a) a distribution from a qualified tuition program account that is used for qualified higher education expenses as defined pursuant to paragraph (3) of subsection (e) of section 529 or a distribution from a qualified ABLE account that is used for qualified disability expenses as defined pursuant to paragraph (5) of subsection (e) of section 529A of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529 or 529A; (b) a rollover from one account to another account as described in clause (i) of subparagraph (C) of paragraph (3) of subsection (c) of section 529, clause (i) of subparagraph (C) of paragraph (1) of subsection (c) of section 529A, or paragraph (5) of subsection (d) of section 530 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529, 529A, or 530; or (c) a change in designated beneficiaries of an account as described in clause (ii) of subparagraph (C) of paragraph (3) of subsection (c) of section 529, clause (ii) of subparagraph (C) of paragraph (1) of subsection (c) of section 529A, or paragraph (6) of subsection (d) of section 530 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529, 529A, or 530; and (d) any other transfer involving a qualified ABLE account which is a qualified distribution for the purposes of section 529A of the federal Internal Revenue Code, 26 U.S.C. s.529A. (4) "Qualified ABLE account" means an account established pursuant to P.L.2015, c.185 (C.52:18A-250 et al.) or an account established pursuant to any qualified State ABLE Program established pursuant to section 529A of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529A. d. The portion of a distribution from a Coverdell education savings account, a qualified ABLE account, or a qualified tuition program account that is attributable to earnings and the amount of the distribution attributable to contributions allowed as a deduction pursuant to section 3 of P.L.2021, c.128 (C.54A:3-12) shall be determined in accordance with the principles of section 72 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.72, as applied for purposes of sections 529, 529A, and 530 of the federal Internal Revenue Code of 1986, 26 U.S.C. ss.529, 529A, and 530. L.1997, c.237, s.13; amended 1999, c.46, s.70; 1999, c.116; 2001, c.262, s.21; 2015, c.185, s.1; 2021, c.128, s.6.

N.J. Stat. § 54A:6-25.1 Loan redemption exempt from taxation.

12. Gross income, for the purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall not include amounts received as a loan redemption under the "Social Services Student Loan Redemption Program," established pursuant to P.L.2005, c.157 (C.18A:71B-87 et al). L.2005,c.157,s.12.

N.J. Stat. § 54A:6-25.2 Gross income, student loan debt, total, permanently disabled veterans.

1. Gross income shall not include amounts discharged through the Total and Permanent Disability discharge process of the United States Department of Education for student loan indebtedness of a taxpayer who is a totally and permanently disabled veteran. As used herein, "totally and permanently disabled veteran" means an individual who has been determined by the United States Department of Veterans Affairs to have a service-connected disability that is 100 percent disabling or to be totally disabled based on an individual unemployability rating. L.2022, c.125.

N.J. Stat. § 54A:6-26 Military pension, survivor's benefit payments excluded from gross income.

1. Gross income shall not include military pension payments or military survivor's benefit payments paid to individuals by the United States with respect to service in the Armed Forces of the United States. L.1997,c.409,s.1; amended 2001, c.84.

N.J. Stat. § 54A:6-27 Contributions to medical savings account not included in gross income.

5. a. Gross income shall not include contributions to a taxpayer's medical savings account that are excluded from the taxpayer's federal gross income pursuant to section 220 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.220. b. Gross income shall not include amounts paid or distributed, or deemed paid or distributed, out of a taxpayer's medical savings account that are excluded from the taxpayer's federal gross income pursuant to section 220 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.220. c. The exclusions provided by subsections a. and b. of this section shall, notwithstanding any amendment or supplement to federal law, be allowed only to "eligible individuals" qualifying under the limitations of subsection (i), and subject to the numerical limits of subsection (j), of section 220 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.220, as in effect on January 1, 1997. L.1997,c.414,s.5.

N.J. Stat. § 54A:6-28 Roth IRA distributions excluded from gross income.

2. a. Gross income shall not include distributions from a Roth IRA that are qualified distributions or that are rolled over to a Roth IRA. b. "Roth IRA" means an individual retirement plan, as defined pursuant to section 7701 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.7701, that is designated in the manner prescribed by the federal Secretary of the Treasury pursuant to section 408A of the federal Internal Revenue Code of 1986, 26 U.S.C. s.408A, as a Roth IRA and is subject to the contribution limits of that section. "Qualified distribution" means any payment or distribution: (1) made on or after the date on which the individual attains age 591/2, (2) made to a beneficiary (or to the estate of the individual) on or after the death of the individual, (3) attributable to the individual's being disabled within the meaning of paragraph (7) of subsection (m) of section 72 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.72, or (4) which is a qualified first time home buyer distribution as defined by, and subject to the limitations of, paragraph (2) of subsection (t) of section 72 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.72; provided, however, that a payment or distribution shall not be treated as a qualified distribution if it is made within the 5-taxable-year period beginning with the first taxable year for which the individual made a contribution to a Roth IRA (or such individual's spouse made a contribution to a Roth IRA) established for such individual, or in the case of a payment or distribution allocable to a qualified rollover contribution from an individual retirement plan other than a Roth IRA (or income allocable thereto), it is made within the 5-taxable year period beginning with the taxable year in which the rollover contribution was made. L.1998,c.57,s.2.

N.J. Stat. § 54A:6-29 Holocaust reparations, restitution excluded from gross income

1. Gross income shall not include amounts received as reparations or restitution for the loss of liberty or damage to health by the victims of National Socialist (Nazi) persecution; returns of tangible or intangible property seized, misappropriated, or lost as a result of National Socialist (Nazi) actions or policies and any cash values in replacement of such property; payments of insurance policies purchased by the victims of National Socialist (Nazi) persecution; and any accumulated or accrued interest on such amounts. National Socialist (Nazi) actions or policies include, but are not limited to, actions and policies taken by Germany and other countries, or by organizations and institutions within those countries, against the victims of the Nazi Holocaust. L.1998,c.113,s.1.

N.J. Stat. § 54A:6-30 Victims of September 11, 2001 terrorist attacks, income exempt from New Jersey gross income tax

1. a. Gross income shall not include the income otherwise taxable under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., of any individual who dies as a result of wounds or injury incurred as a result of the terrorist attacks against the United States on September 11, 2001, with respect to the taxpayer's taxable year in which falls the date of death of the taxpayer and with respect to any prior taxable year in the period beginning with the last taxable year ending before the taxable year in which the wounds or injury were incurred. b. This section shall not apply to any individual identified by the Attorney General of the United States to have been a participant or conspirator in those attacks. c. The amount of any income tax paid that is excludable pursuant to this section shall be an overpayment for the purposes of N.J.S.54A:9-7, provided however, that subsection (f) of N.J.S.54A:9-7 shall not apply. Notwithstanding the periods of limitation for refunds of overpayments set forth in N.J.S.54A:9-8, a claim for a refund of overpayment shall be filed on behalf of a taxpayer within four years after the taxpayer's taxable year in which falls the date of death of the taxpayer. L.2003,c.9.

N.J. Stat. § 54A:6-31 Family leave benefits not included in gross income.

16. Gross income shall not include benefits for family temporary disability leave paid pursuant to P.L.1948, c.110 (C.43:21-25 et al.) and P.L.2008, c.17 (C.43:21-39.1 et al.). L.2008, c.17, s.16.

N.J. Stat. § 54A:6-32 Combat zone compensation not considered gross income.

1. Gross income shall not include amounts received as combat zone compensation by members of the Armed Forces of the United States that is excluded from federal taxable income pursuant to section 112 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.112. L.2020, c.93.

N.J. Stat. § 54A:6-33 Gross income, not including compensation for services performed, district board of elections.

3. Gross income, for the purposes of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall not include any compensation received pursuant to R.S.19:6-9.1 and R.S.19:45-6 for the services performed by a member of a district board of elections or for such services performed pursuant to subsection d. of section 1 of P.L.2021, c.40 (C.19:15A-1). L.2022, c.71, s.3.

N.J. Stat. § 54A:6-34 Gross income, certain exemptions, small business stock.

1. Notwithstanding any law or regulation to the contrary, gross income shall not include net gains or income derived from the sale, exchange, or other disposition of qualified small business stock to the extent such gains or income are exempt from federal taxation pursuant to section 1202 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.1202). L.2025, c.67.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026