Bill Text: NJ A1122 | 2024-2025 | Regular Session | Introduced
Bill Title: Modifies certain tax brackets under gross income tax.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced) 2024-01-09 - Introduced, Referred to Assembly Commerce, Economic Development and Agriculture Committee [A1122 Detail]
Download: New_Jersey-2024-A1122-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblyman JOHN DIMAIO
District 23 (Hunterdon, Somerset and Warren)
Assemblywoman NANCY F. MUNOZ
District 21 (Middlesex, Morris, Somerset and Union)
Co-Sponsored by:
Assemblywoman Dunn
SYNOPSIS
Modifies certain tax brackets under gross income tax.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act modifying certain tax brackets under the gross income tax and amending N.J.S.54A:2-1.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.54A:2-1 is amended to read as follows:
54A:2-1. Imposition of tax. There is hereby imposed a tax for each taxable year (which shall be the same as the taxable year for federal income tax purposes) on the New Jersey gross income as herein defined of every individual, estate or trust (other than a charitable trust or a trust forming part of a pension or profit-sharing plan), subject to the deductions, limitations and modifications hereinafter provided, determined in accordance with the following tables with respect to taxpayers' taxable income:
a. For married individuals filing a joint return and individuals filing as head of household or as surviving spouse for federal income tax purposes:
(1) for taxable years beginning on or after January 1, 1991 but before January 1, 1994:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . 2% of taxable income
Over $20,000.00 but not
over $50,000.00 . . . . . $400.00 plus 2.5% of the excess over $20,000.00
Over $50,000.00 but not
over $70,000.00 . . . . . $1,150.00 plus 3.5% of the excess over $50,000.00
Over $70,000.00 but not
over $80,000.00 . . . . . $1,850.00 plus 5.0% of the excess over $70,000.00
Over $80,000.00 but not
over $150,000.00 . . . . . $2,350.00 plus 6.5% of the excess over $80,000.00
Over $150,000.00 . . . . . . . . $6,900.00 plus 7.0% of the
excess over $150,000.00
(2) for taxable years beginning on or after January 1, 1994 but before January 1, 1995:
If the taxable income is: The tax is:
Not over $20,000.00 . . . 1.900% of taxable income
Over $20,000.00 but not
over $50,000.00 . . . . $380.00 plus 2.375% of the excess over $20,000.00
Over $50,000.00 but not
over $70,000.00 . . . . $1,092.50 plus 3.325% of the excess over $50,000.00
Over $70,000.00 but not
over $80,000.00 . . . . $1,757.50 plus 4.750% of the excess over $70,000.00
Over $80,000.00 but not
over $150,000.00 . . . . $2,232.50 plus 6.175% of the excess over $80,000.00
Over $150,000.00 . . . . . . . $6,555.00 plus 6.650% of the excess over $150,000.00
(3) for taxable years beginning on or after January 1, 1995 but before January 1, 1996:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . 1.700% of taxable income
Over $20,000.00 but not
over $50,000.00 . . . . . $340.00 plus 2.125% of the excess over $20,000.00
Over $50,000.00 but not
over $70,000.00 . . . . . $977.50 plus 2.975% of the excess over $50,000.00
Over $70,000.00 but not
over $80,000.00 . . . . . $1,572.50 plus 4.250% of the excess over $70,000.00
Over $80,000.00 but not
over $150,000.00 . . . . . $1,997.50 plus 6.013% of the excess over $80,000.00
Over $150,000.00 . . . . . . . $6,206.60 plus 6.580% of the excess over $150,000.00
(4) for taxable years
beginning on or after January 1, 1996 but before January
1, 2004:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . 1.400% of taxable income
Over $20,000.00 but not
over $50,000.00 . . . . . $280.00 plus 1.750% of the excess over $20,000.00
Over $50,000.00 but not
over $70,000.00 . . . . . $805.00 plus 2.450% of the excess over $50,000.00
Over $70,000.00 but not
over $80,000.00 . . . . . $1,295.50 plus 3.500% of the excess over $70,000.00
Over $80,000.00 but not
over $150,000.00 . . . . . $1,645.00 plus 5.525% of the excess over $80,000.00
Over $150,000.00 . . . . . . . . $5,512.50 plus 6.370% of the excess over $150,000.00
(5) for taxable years beginning on or after January 1, 2004 but before January 1, 2018:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . . . 1.400% of taxable income
Over $20,000.00 but not
over $50,000.00 . . . . . . . $280.00 plus 1.750% of the excess over $20,000.00
Over $50,000.00 but not
over $70,000.00 . . . . . . . . $805.00 plus 2.450% of the excess over $50,000.00
Over $70,000.00 but not
over $80,000.00 . . . . . . . $1,295.50 plus 3.500% of the excess over $70,000.00
Over $80,000.00 but not
over $150,000.00 . . . . . . . $1,645.00 plus 5.525% of the excess over $80,000.00
Over $150,000.00 but not
over $500,000.00 . . . . . . $5,512.50 plus 6.370% of the excess over $150,000.00
Over $500,000.00 . . . . . . . . $27,807.50 plus 8.970% of
the excess over $500,000.00
(6) for taxable years beginning on or after January 1, 2018 but before January 1, 2020:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . . . 1.400% of taxable income
Over $20,000.00 but not
over $50,000.00 . . . . . . . $280.00 plus 1.750% of the excess over $20,000.00
Over $50,000.00 but not
over $70,000.00 . . . . . . . . $805.00 plus 2.450% of the excess over $50,000.00
Over $70,000.00 but not
over $80,000.00 . . . . . . . $1,295.50 plus 3.500% of the excess over $70,000.00
Over $80,000.00 but not
over $150,000.00 . . . . . . . $1,645.00 plus 5.525% of the excess over $80,000.00
Over $150,000.00 but not
over $500,000.00 . . . . . . $5,512.50 plus 6.370% of the excess over $150,000.00
Over $500,000.00 but not
over $5,000,000.00 . . . . . . . . $27,807.50 plus 8.970% of the excess over $500,000.00
Over $5,000,000.00 . . . . . . . . $431,457.50 plus 10.75% of the excess over $5,000,000.00
(7) for taxable years beginning on or after January 1, 2020 but before January 1, 2022:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . . . 1.400% of taxable income
Over $20,000.00 but not
over $50,000.00 . . . . . . . $280.00 plus 1.750% of the excess over $20,000.00
Over $50,000.00 but not
over $70,000.00 . . . . . . . $805.00 plus 2.450% of the excess over $50,000.00
Over $70,000.00 but not
over $80,000.00 . . . . . . . $1,295.50 plus 3.500% of the excess over $70,000.00
Over $80,000.00 but not
over $150,000.00 . . . . . . . $1,645.00 plus 5.525% of
the excess over $80,000.00
Over $150,000.00 but not
over $500,000.00 . . . . . . $5,512.50 plus 6.370% of the excess over $150,000.00
Over $500,000.00 but not
over $1,000,000.00 . . . . . . . . $27,807.50 plus 8.970% of the excess over $500,000.00
Over $1,000,000.00 . . . . . . . . $72,657.50 plus 10.75% of the excess over $1,000,000.00
(8) for taxable years beginning on or after January 1, 2022:
If the taxable income is: The tax is:
Not over $68,510.00 . . . . . . . 1.400% of taxable income
Over $68,510.00 but not
over $119,892.00 . . . . . . . $959.14 plus 1.750% of the excess over $68,510.00
Over $119,892.00 but not
over $137,020.00 . . . . . . . $1,858.33 plus 3.500% of the excess over $119,892.00
Over $137,020.00 but not
over $256,910.00 . . . . . . . $2,457.81 plus 5.525% of the excess over $137,020.00
Over $256,910.00 but not
over $500,000.00 . . . . . . $9,081.73 plus 6.370% of the excess over $256,910.00
Over $500,000.00 but not
over $1,000,000.00 . . . . . . . . $24,566.56 plus 8.970% of the excess over $500,000.00
Over $1,000,000.00 . . . . . . . . $69,416.56 plus 10.75% of the excess over $1,000,000.00
b. For married individuals filing separately, unmarried individuals other than individuals filing as head of household or as a surviving spouse for federal income tax purposes, and estates and trusts:
(1) for taxable years beginning on or after January 1, 1991 but before January 1, 1994:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . 2% of taxable income
Over $20,000.00 but not
over $35,000.00 . . . . . $400.00 plus 2.5% of the excess over $20,000.00
Over $35,000.00 but not
over $40,000.00 . . . . . $775.00 plus 5.0% of the excess over $35,000.00
Over $40,000.00 but not
over $75,000.00 . . . . . $1,025.00 plus 6.5% of the excess over $40,000.00
Over $75,000.00 . . . . . . . . $3,300.00 plus 7.0% of the excess over $75,000.00
(2) for taxable years beginning on or after January 1, 1994 but
before January 1, 1995:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . 1.900% of taxable income
Over $20,000.00 but not
over $35,000.00 . . . . . $380.00 plus 2.375% of the excess over $20,000.00
Over $35,000.00 but not
over $40,000.00 . . . . . $736.25 plus 4.750% of the excess over $35,000.00
Over $40,000.00 but not
over $75,000.00 . . . . . $973.75 plus 6.175% of the excess over $40,000.00
Over $75,000.00 . . . . . . . . $3,135.00 plus 6.650% of the excess over $75,000.00
(3) for taxable years beginning on or after January 1, 1995 but before January 1, 1996:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . 1.700% of taxable income
Over $20,000.00 but not
over $35,000.00 . . . . . $340.00 plus 2.125% of the excess over $20,000.00
Over $35,000.00 but not
over $40,000.00 . . . . . $658.75 plus 4.250% of the excess over $35,000.00
Over $40,000.00 but not
over $75,000.00 . . . . . $871.25 plus 6.013% of the excess over $40,000.00
Over $75,000.00 . . . . . $2,975.80 plus 6.580% of the excess over $75,000.00
(4) for taxable years beginning on or after January 1, 1996 but before January 1, 2004:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . 1.400% of taxable income
Over $20,000.00 but not
over $35,000.00 . . . . . $280.00 plus 1.750% of the excess over $20,000.00
Over $35,000.00 but not
over $40,000.00 . . . . . $542.50 plus 3.500% of the excess over $35,000.00
Over $40,000.00 but not
over $75,000.00 . . . . . $717.50 plus 5.525% of the excess over $40,000.00
Over $75,000.00 . . . . . $2,651.25 plus 6.370% of the excess over $75,000.00
(5) for taxable years beginning on or after January 1, 2004 but before January 1, 2018:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . 1.400% of taxable income
Over $20,000.00 but not
over $35,000.00 . . . . . $280.00 plus 1.750% of the excess over $20,000.00
Over $35,000.00 but not
over $40,000.00 . . . . . $542.50 plus 3.500% of the excess over $35,000.00
Over $40,000.00 but not
over $75,000.00 . . . . . $717.50 plus 5.525% of the excess over $40,000.00
Over $75,000.00 but not
over $500,000.00 . . . . . $2,651.25 plus 6.370% of the excess over $75,000.00
Over $500,000.00 . . . . . $29,723.75 plus 8.970% of the excess over $500,000.00
(6) for taxable years beginning on or after January 1, 2018, but before January 1, 2020:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . 1.400%
of taxable income
Over $20,000.00 but not
over $35,000.00 . . . . . $280.00 plus 1.750% of the excess over $20,000.00
Over $35,000.00 but not
over $40,000.00 . . . . . $542.50 plus 3.500% of the excess over $35,000.00
Over $40,000.00 but not
over $75,000.00 . . . . . $717.50 plus 5.525% of the excess over $40,000.00
Over $75,000.00 but not
over $500,000.00 . . . . . $2,651.25 plus 6.370% of the excess over $75,000.00
Over $500,000.00 but not
over $5,000,000.00 . . . . . $29,723.75 plus 8.970% of the excess over $500,000.00
Over $5,000,000.00 . . . . . $433,373.75 plus 10.75% of the excess over $5,000,000.00
(7) for taxable years beginning on or after January 1, 2020 but before January 1, 2022:
If the taxable income is: The tax is:
Not over $20,000.00 . . . . . 1.400% of taxable income
Over $20,000.00 but not
over $35,000.00 . . . . . $280.00 plus 1.750% of the excess over $20,000.00
Over $35,000.00 but not
over $40,000.00 . . . . . $542.50 plus 3.500% of the excess over $35,000.00
Over $40,000.00 but not
over $75,000.00 . . . . . $717.50 plus 5.525% of the excess over $40,000.00
Over $75,000.00 but not
over $500,000.00 . . . . . $2,651.25 plus 6.370% of the excess over $75,000.00
Over $500,000.00 but not
over $1,000,000.00 . . . . . $29,723.75 plus 8.970% of the excess over $500,000.00
Over $1,000,000.00 . . . . . $74,573.75 plus 10.75% of the
excess over $1,000,000.00
(8) for taxable years beginning on or after January 1, 2022:
If the taxable income is: The tax is:
Not over $34,255.00 . . . . . . . 1.400% of taxable income
Over $34,255.00 but not
over $59,946.00 . . . . . . . $479.57 plus 1.750% of the excess over $34,255.00
Over $59,946.00 but not
over $68,510.00 . . . . . . . $929.16 plus 3.500% of the excess over $59,946.00
Over $68,510.00 but not
over $128,455.00 . . . . . . . $1,228.90 plus 5.525% of the excess over $68,510.00
Over $128,455.00 but not
over $500,000.00 . . . . . . $4,540.86 plus 6.370% of the excess over $128,455.00
Over $500,000.00 but not
over $1,000,000.00 . . . . . . . . $28,208.28 plus 8.970% of the excess over $500,000.00
Over $1,000,000.00 . . . . . . . . $73,058.28 plus 10.75% of the excess over $1,000,000.00
c. For the purposes of this section, an individual who would be eligible to file as a head of household for federal income tax purposes but for the fact that such taxpayer is a nonresident alien, shall determine tax pursuant to subsection a. of this section.
d. For the purposes of this section, for taxable year 2018, withholding by every employer from salaries, wages and other remuneration paid by an employer for services rendered described in subsections a. and b. of this section, in excess of $5,000,000 during that taxable year, shall be at the rate of 15.6% as soon as practicable but no later than September 1, 2018. The Director of the Division of Taxation is authorized to do all things necessary to implement the withholding tax prescribed by this section for taxable year 2018.
e. No additions to tax or penalty shall be imposed under N.J.S.54A:9-6 for insufficient payment of estimated tax that may otherwise be due on salaries, wages and other remuneration received before September 1, 2018, on which there is a rate of tax imposed pursuant to subsections a. and b. of this section.
f. An employer maintaining an office or transacting business within this State and making payment of any salaries, wages and remuneration subject to New Jersey gross income tax or making payment of any remuneration for employment subject to contribution under the New Jersey "unemployment compensation law," pursuant to R.S.43:21-1 et seq., that is subject to New Jersey gross income tax shall not be subject to interest, penalties or other costs that may otherwise be imposed for insufficient withholding of salaries, wages and other remuneration made before September 1, 2018, that is directly attributable to the enactment of the taxable income tables and tax rates in subsections a. and b. of this section.
(cf: P.L.2020, c.94, s.1)
2. This act shall take effect immediately and apply to taxable years beginning on or after January 1, 2022.
STATEMENT
This bill modifies certain tax brackets under the New Jersey gross income tax. Specifically, the bill modifies the income thresholds of the four lowest tax brackets so that many low-income and middle-income taxpayers would be eligible for a lower marginal tax rate.
In recent months, record-high inflation has made it more difficult for Americans to afford food, gas, and other critical goods and services. This bill would help New Jerseyans weather this surge in prices by allowing them to keep more of their hard-earned money.
