Bill Text: NJ S4478 | 2026-2027 | Regular Session | Introduced
Bill Title: Modifies gross income tax withholding requirements for certain State Lottery winnings received by persons without social security or tax identification number.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced) 2026-06-22 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S4478 Detail]
Download: New_Jersey-2026-S4478-Introduced.html
Sponsored by:
Senator MICHAEL L. TESTA, JR.
District 1 (Atlantic, Cape May and Cumberland)
SYNOPSIS
Modifies gross income tax withholding requirements for certain State Lottery winnings received by persons without social security or tax identification number.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the withholding of certain lottery winnings and amending N.J.S.54A:7-1.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.54A:7-1 is amended to read as follows:
54A:7-1. Requirement of withholding tax from wages.
(a) General.--From and after September 1, 1976, every employer maintaining an office or transacting business within this State and making payment of any wages subject to New Jersey personal 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 personal income tax to a resident or nonresident individual shall deduct and withhold from such wages for each payroll period a tax computed in such manner as to result, so far as practicable, in withholding from the employee's wages during each calendar year an amount substantially equivalent to the tax reasonably estimated to be due resulting from the inclusion in the employee's New Jersey income of his wages received during such calendar year. The method of determining the amount to be withheld shall be prescribed by regulations of the director, with due regard to the withholding exemptions of the employee.
(b) Withholding exemptions.--For purposes of this section:
An employee shall be entitled to the equivalent of the same number of New Jersey withholding exemptions as the number of withholding exemptions to which he is entitled for Federal income tax withholding purposes. An employer may rely upon the number of Federal withholding exemptions claimed by the employee.
(c) The payor of New Jersey gambling winnings shall withhold New Jersey gross income tax on those winnings at a rate of [3%] three percent in all instances where the payor is required to withhold for federal income tax purposes under subsection (q) of section 3402 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.3402), as amended, except that this subsection shall not apply to the New Jersey State Lottery, except if winnings paid by the New Jersey State Lottery are included in gross income pursuant to N.J.S.54A:6-11. The rate of withholding for gambling winnings paid by the New Jersey State Lottery shall be determined by the director, except that notwithstanding the exclusion from gross income provided in N.J.S.54A:6-11, the rate of withholding for gambling winnings for a prize in an amount exceeding $600 paid by the New Jersey State Lottery shall be eight percent if the person receiving payment of the winnings fails to provide proof of a federal social security number or federal taxpayer identification number.
(cf: P.L.2009, c.69, s.4)
2. This act shall take effect immediately and apply to prize claims submitted on or after the date of enactment.
STATEMENT
This bill modifies the gross income tax withholding requirements for the payment of certain State Lottery winnings to persons who do not possess a federal social security or tax identification number.
Under current law, the Division of State Lottery is required to withhold a percentage of New Jersey Lottery winnings when the prize amount exceeds $10,000. For prizes that are greater than $10,000 but not $500,000, the division currently withholds five percent of the winnings for gross income tax purposes. However, if the person receiving the winnings does not include proof of a federal social security number or tax identification number, the division withholds eight percent of the winnings for gross income tax purposes.
Under the bill, the division is required to withhold eight percent of the winnings of prize amounts exceeding $600 paid to any person who fails to provide proof of a federal social security number or taxpayer identification number.
