New Jersey tax deductions and write-offs (2026)

No. New Jersey fully exempts U.S. armed forces retired pay from state income tax. The exemption does not currently cover USPHS or NOAA Corps retirees; bills to add them were pending in 2026. Other retirement income: Taxpayers 62+ (or disabled) with total income of $100,000 or less may exclude pensions, annuities, and IRA withdrawals up to $100,000 joint / $75,000 single / $50,000 married filing separately. A reduced percentage applies at $100,001–$150,000, with no exclusion above $150,000.

Partly. Taxpayers 62+ (or disabled) with total income of $100,000 or less may exclude pensions, annuities, and IRA withdrawals up to $100,000 joint / $75,000 single / $50,000 married filing separately. A reduced percentage applies at $100,001–$150,000, with no exclusion above $150,000.

No. New Jersey does not tax Social Security or Railroad Retirement benefits, and they are not reported on the state return.

Yes: New Jersey offers the New Jersey Earned Income Tax Credit (NJEITC), 40% of the federal EITC (refundable). Workers without children eligible from age 18, including 65+, if they meet all other federal rules. Valid SSNs required; ITIN filers not eligible. 2026 bills to raise the rate to 45% and add ITIN filers were introduced but not enacted as of this writing.

Only instead of income tax: itemizers in New Jersey pick sales tax (6.625% state rate, about 6.6% with local taxes) or state income tax, whichever is bigger. Most clothing, footwear, and grocery food is exempt; there are no general local sales taxes, and the average combined rate is slightly below 6.625% because of half-rate Urban Enterprise Zones.

Yes federally within the SALT cap, and New Jersey residents can also deduct up to $15,000 of property tax on the state return.

Yes: New Jersey offers the Property Tax Deduction/Credit for Tenants; ANCHOR. On Form NJ-1040, 18% of rent counts as property tax, so tenants can deduct that amount (up to $15,000) or take a refundable $50 credit, whichever is better. Renters can also get a separate ANCHOR benefit of $450, or $700 if 65+. Deduction/credit: rental must be subject to property tax and gross income above $20,000 ($10,000 single/MFS) unless 65+, blind, or disabled. ANCHOR: New Jersey gross income of $150,000 or less, and your name must be on the lease.

No: New Jersey doesn't base registration on your car's value, so it isn't deductible as personal property tax. Passenger fees run $46.50-$84 per year by weight and whether the car is within two model years, plus flat surcharges.

New Jersey taxes 401(k) contributions going in (so they aren't taxed again on withdrawal), offers a property tax deduction up to $15,000, and taxes income up to 10.75%.

Yes for state tax: New Jersey residents with income up to $200,000 can deduct up to $10,000 of NJ 529 contributions.

Yes: Per child under 6, by NJ taxable income (any filing status), for tax years 2026-2028: $1,250 at $30,000 or less; $1,000 for $30,001-$40,000; $750 for $40,001-$50,000; $500 for $50,001-$60,000; $250 for $60,001-$80,000; nothing above $80,000. Refundable. ITIN filers are eligible.

Yes, as a business expense: New Jersey charges $100 to form an LLC; ongoing: $75 annual report. Formation fee reduced from $125 effective July 1, 2026 (P.L. 2026, c.24). Annual report due by end of the anniversary month.