Bill Text: NJ A137 | 2026-2027 | Regular Session | Introduced
Bill Title: Permits teacher who retired from TPAF to return to employment for two years without reenrollment in TPAF; provides gross income tax relief for certain rehired teachers.
Sponsorship: Bipartisan Bill
Status: (Introduced) 2026-01-13 - Introduced, Referred to Assembly Education Committee [A137 Detail]
Download: New_Jersey-2026-A137-Introduced.html
STATE OF NEW JERSEY
222nd LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblyman AL BARLAS
District 40 (Bergen, Essex and Passaic)
Assemblywoman VERLINA REYNOLDS-JACKSON
District 15 (Hunterdon and Mercer)
SYNOPSIS
Permits teacher who retired from TPAF to return to employment for two years without reenrollment in TPAF; provides gross income tax relief for certain rehired teachers.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning return to employment by a teacher after retirement from the Teachers' Pension and Annuity Fund and supplementing Title 18A and Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Notwithstanding the provisions of any law or regulation to the contrary, a board of education may, subject to the approval of the executive county superintendent of schools, hire a retired teacher who is a former member of the Teachers' Pension and Annuity Fund on a contractual basis for a term of not more than two full school years provided that the salary paid to the retired teacher meets the criteria enumerated in subsection d. of this section. The retired teacher shall not be subject to the cancellation, reenrollment, and additional retirement allowance provisions of N.J.S.18A:66-53.2, except that the cancellation, reenrollment, and additional retirement allowance provisions shall apply if the former member becomes employed within 180 days with the employer from which the member retired. Employment or reemployment exceeding two full school years shall be subject to the provisions of N.J.S.18A:66-53.2.
The former member's retirement shall have been a bona fide retirement and any employment or reemployment under this section shall not be prearranged before retirement.
b. A retired teacher employed or reemployed pursuant to subsection a. of this section shall not obtain tenure in the position and any tenure or seniority rights previously obtained by the teacher shall not apply to the period of employment or reemployment.
c. The approval of the executive county superintendent of schools pursuant to subsection a. of this section shall be granted only upon demonstration by the board of education that the board conducted a thorough search for candidates and that the retired teacher is the only qualified and available person for the position.
d. A retired teacher employed or reemployed pursuant to subsection a. of this section may be hired on a contractual basis at a salary not less than 40 percent and not to exceed 70 percent of the median salary of a teacher employed by the board of education.
2. a. A taxpayer who is a retired teacher, and who has been hired on a contractual basis pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), shall be allowed to deduct from the taxpayer's gross income an amount equal to 50 percent of the salary or other remuneration paid to the taxpayer during the taxable year for services rendered pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. For a taxpayer who claims a deduction pursuant to subsection a. of this section, and who also receives income from other sources, the taxpayer shall first claim any other exemption or deduction allowed in the taxable year against the gross income attributable to the taxpayer's other sources of income before claiming any remaining allowable exemption or deduction against the portion of gross income received as salary and other remuneration for services rendered pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).
3. Notwithstanding the rates of tax imposed pursuant to N.J.S.54A:2-1, the rate of tax imposed on the portion of gross income received as salary or other remuneration for services rendered pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), and which is not deducted pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), shall be the rate of 1.4 percent regardless of the taxpayer's filing status, provided that such amount of gross income exceeds the minimum taxable income for the taxpayer established in N.J.S.54A:2-4.
4. This act shall take effect immediately.
STATEMENT
This bill permits a teacher who retired from the Teachers' Pension and Annuity Fund (TPAF) to return to employment for two years without reenrollment in the TPAF and provides gross income tax relief for certain rehired teachers.
The bill permits a board of education to, with the approval of the executive county superintendent of schools, hire a retired teacher who is a former member of the TPAF on a contractual basis for a term of not more than two full school years. The approval of the executive county superintendent is to only be granted upon demonstration by the board of education that the board conducted a thorough search for candidates and that the retired teacher is the only qualified and available person for the position. The bill stipulates that the retired teacher may be hired at a salary not less than 40 percent and not to exceed 70 percent of the median salary of a teacher employed by the board of education.
Under the bill, the cancellation, reenrollment, and additional retirement allowance provisions of current law do not apply to the retired teacher hired or rehired under the bill, provided that if the retired teacher returns to work with the former employer, it is required to occur more than 180 days after the retirement. The bill also provides that the former member's retirement is to be a bona fide retirement and any employment or reemployment under the bill is prohibited from being prearranged before retirement.
Additionally, the bill stipulates that a retired teacher employed or reemployed under the bill is not to obtain tenure in the position and any tenure or seniority rights previously obtained by the teacher do not apply to the period of employment or reemployment.
The bill also provides gross income tax relief for retired teachers who are rehired in accordance with the provisions of the bill. Specifically, the bill provides a gross income tax deduction in the amount of 50 percent of the salary or other remuneration paid to a retired teacher under the bill. Of the remaining salary or remuneration paid to a retired teacher under the bill, this income would be taxed separately under the gross income tax at a rate of 1.4 percent, regardless of the taxpayer's filing status.
