New Jersey state tax: Overview
New Jersey state sales tax isn't so high compared to sales taxes in other states. After all, several products in the state are exempt from tax and New Jersey's sales tax rate is reduced in some areas.
However, New Jersey's property taxes are high compared to other states, and income tax rates in New Jersey can climb quite high, depending on how much you earn.
In the News: Some New Jersey residents may be getting much-needed relief from their property taxes. The Garden State is mailing over $145 million to eligible homeowners. See if the state's property tax freeze applies to you.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
New Jersey income tax
New Jersey Income Tax Range: Single filers
| Up to $20,000 | 1.4% |
| $20,001 to $35,000 | 1.75% |
| $35,001 to $40,000 | 3.5% |
| $40,001 to $75,000 | 5.525% |
| $75,001 to $500,000 | 6.37% |
| $500,001 to $1 million | 8.97% |
| More than $1 million | 10.75% |
New Jersey Income Tax Range: Joint filers
| Up to $20,000 | 1.4% |
| $20,001 to $50,000 | 1.75% |
| $50,001 to $70,000 | 2.45% |
| $70,001 to $80,000 | 3.5% |
| $80,001 to $150,000 | 5.525% |
| $151,000 to $500,000 | 6.37% |
| $500,001 to $1 million | 8.97% |
| More than $1 million | 10.75% |
New Jersey tax on retirement income: New Jersey doesn't tax Social Security retirement benefits, Military pensions, or Railroad Retirement benefits.
Taxpayers 62 and older (or those who have a disability) may exclude all or part of their retirement income from state taxation. For the 2024 tax year to qualify for the exclusion, taxpayers cannot have an income above $150,000.
New Jersey sales tax
New Jersey imposes a 6.625% state sales tax. Localities can add an additional 3.313%.
However, the average local and combined sales tax rate is only 6.601%, according to the Tax Foundation. That's because the sales tax rate is reduced to 3.3125% in New Jersey's Urban Enterprise Zones.
- Groceries are tax-exempt.
- Prescription drugs are tax-exempt.
- Diapers are tax-exempt.
- Women's menstrual products are tax-exempt.
How much are property taxes in New Jersey?
In New Jersey, the average effective property tax rate is 2.08%, which is one of the highest in the nation.
New Jersey Property Tax Breaks for Older Adults
Eligible New Jersey homeowners may receive a property tax freeze. To qualify, residents must have lived in their current home since at least 2019, among other requirements. See the state's Treasury website for more detail.
New Jersey gas tax
Gasoline: $0.318 per gallon (effective July 2024)
Diesel: $0.358 per gallon (effective July 2024)
New Jersey taxes on alcohol and tobacco
| Cigarettes | $2.70 per pack |
| Other tobacco products | 30% of wholesale price |
| Beer | $0.12 per gallon |
| Wine | $0.875 per gallon |
| Liquor | $5.50 per gallon |
New Jersey estate and inheritance taxes
There is no longer an estate tax in New Jersey, but that doesn't mean residents are off the hook for paying death taxes.
The state has an inheritance tax of between 11% and 16%. However, the heirs below won't need to pay a thing.
- Spouses
- Children
- Grandchildren and great-grandchildren
- Parents and grandparents
- Civil union partners
Related Content
-
Need More Money for Retirement? You May Have Already Saved It.Over 29 million lost 401(k) accounts worth almost $1.65 trillion have been forgotten by their owners. Here are eight ways you can locate your account.
-
Five Ways to Save for Retirement in 2025If you did a poor job saving for retirement last year, don't despair. There are ways to build your nest egg in the new year.
-
California Fires: How to Recover Tax Records and Other Important DocumentsDisaster Recovery Having your tax records and other vital documents is important for claiming casualty loss deductions that can help with recovery.
-
Child and Dependent Care Credit: How Much Is It?CDCTC The non-refundable tax break can help working families afford quality care for their child or qualifying dependent.
-
Gov. Hochul Wants to Triple the New York Child Tax CreditState Tax Millions of New York families could get a larger state child tax credit check over the next two years under a new proposal.
-
U.S. Consumers May Feel Pinch From Panama Canal Tariff HikeTax Policy The Panama Canal tariffs on crossing ships will add to looming price hikes for U.S. consumers as Trump threatens to take control of the historic waterway.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
-
Does Your State Have a Child and Dependent Care Tax Credit?
Child and Dependent Care Tax Credit Over two dozen states, plus the District of Columbia offer tax credits or deductions for working families.
-
Should Rent Be Part of Your Retirement Plans?Retirement Taxes Retiree renters may qualify for potential tax savings. Are you considering a move?
-
On the Naughty List: Holiday Tax Scams to Look Out ForTax Tips The IRS says scammers are on the prowl for your financial information. Know the signs so you don't fall victim.
