New Jersey State Taxes
Quick Tax Facts
Income Tax: 1.4% – 10.75%
State Sales Tax: 6.625%
Median Property Tax: $10,095
Overview
New Jersey, also known as the Garden State, is famous for its beaches (Jersey Shore) and top-notch educational opportunities. It’s culturally diverse and often ranks as one of the happiest states in the country. When it comes to taxes, however, it’s actually one of the least friendly, especially for high-income earners. The state has a steep progressive income tax rate structure and the highest property taxes in the country.
New Jersey Income Tax
New Jersey has a progressive income tax rate structure that increases with income. The state income tax rates currently range between 1.4% and 10.75%.
| New Jersey Income Tax Rates – Single or Married Filing Separately |
|---|
| If your taxable income is more than: | But not more than: | Your tax rate is: | Minus: |
|---|---|---|---|
| $0 | $20,000 | 1.4% | $0 |
| $20,000 | $35,000 | 1.75% | $70 |
| $35,000 | $40,000 | 3.5% | $682.50 |
| $40,000 | $75,000 | 5.525% | $1,492.50 |
| $75,000 | $500,000 | 6.37% | $2,126.25 |
| $500,000 | $1,000,000 | 8.97% | $15,126.25 |
| $1,000,000 | 10.75% | $32,926.25 |
| New Jersey Income Tax Rates – Head of Household, Married Filing Jointly, or Qualifying Widow(er) |
|---|
| If your taxable income is more than: | But not more than: | Your tax rate is: | Minus: |
|---|---|---|---|
| $0 | $20,000 | 1.4% | $0 |
| $20,000 | $50,000 | 1.75% | $70 |
| $50,000 | $70,000 | 2.45% | $420 |
| $70,000 | $80,000 | 3.5% | $1,154.50 |
| $80,000 | $150,000 | 5.525% | $2,775 |
| $150,000 | $500,000 | 6.37% | $4,042.50 |
| $500,000 | $1,000,000 | 8.97% | $17,042.50 |
| $1,000,000 | 10.75% | $34,842.50 |
Who Must File?
Full-year and part-year residents must file a state income tax return (NJ-1040) if they meet or exceed the filing thresholds below.
| New Jersey Filing Thresholds |
|---|
| Filing status: | And gross income from everywhere is more than: |
|---|---|
| Single or Married Filing Separately | $10,000 |
| Married Filing Jointly, Head of Household, or Qualifying Widow(er) | $20,000 |
Non-residents with income from New Jersey sources should file NJ-1040NR. Part-year residents may have to file both Form NJ-1040 to report income received while living in the state and Form NJ-1040NR to claim income sources while residing outside of New Jersey.
New Jersey residents who work or live abroad have the same filing requirements as those living in New Jersey.
New Jersey Sales Tax
New Jersey’s state sales tax rate is 6.625%. There are no local sales taxes, however, the specially designated Urban Enterprise Zones are allowed to collect one-half of the sales tax rate. Certain items, such as unprepared food, clothing, and medication are tax-exempt.
New Jersey Property Taxes
New Jersey’s effective property tax rate is 2.26% which is the highest in the country. Unfortunately, rising home prices also result in residents paying some of the largest property tax bills, as well.
The median property tax bill in New Jersey is $10,095. Tavistock Borough has the highest average annual bill at $37,908. The lowest average property tax bill in the state is $1,156 in Walpack Township.
| Highest | $37908 |
|---|---|
| Median | $10095 |
| Lowest | $1156 |
Yearly Cost Per Resident
New Jersey Tax Holidays
New Jersey repealed its annual Back-to-School Sales Tax Holiday in 2024.
New Jersey Tax Relief
Having an outstanding New Jersey income tax balance can put added pressure on your finances, especially when penalties and interest continue to accrue. If the debt isn’t resolved, the New Jersey Division of Taxation may use various collection methods to recover unpaid taxes. Tax debt can result from many circumstances, including missed filings, financial setbacks, or unresolved business tax obligations, but addressing the issue early may help keep it from becoming more difficult to manage.
For taxpayers who can’t afford to pay their New Jersey tax debt in full, there may be other ways to resolve the balance. Depending on your financial circumstances and eligibility, you may be able to establish a payment plan or explore other available tax relief options. Taking steps toward a resolution may also help you avoid or address collection actions such as tax liens, wage garnishments, and bank levies.
Understanding how New Jersey handles delinquent taxes and what resolution options are available can help you determine the best path forward. The sooner you address your outstanding tax obligations, the sooner you can begin working toward resolving your balance and getting your New Jersey tax account back on track.
Common New Jersey State Tax Problems
Back Taxes
If you owe unpaid New Jersey taxes, addressing your balance early may help you avoid additional penalties and collection actions.
Unfiled Tax Returns
Filing past-due New Jersey tax returns is often the first step toward resolving your state tax issues.
Tax Notices
Notices from the NJ Department of Revenue shouldn’t be ignored, as they often require prompt action to prevent further collections.
Liens & Levies
Unresolved tax debt may lead to liens against your property or levies on your assets as the state works to collect what is owed.
Garnishment
New Jersey may garnish your wages to collect unpaid taxes, reducing the amount of each paycheck you receive.
Tax Penalties
Unpaid taxes can continue to accrue penalties and interest until your balance is resolved.
How New Jersey Collects Tax Debt
If you owe New Jersey income taxes and don’t pay, the state will send a delinquency notice or a Notice of Deficiency. Failure to respond or pay will result in the account being transferred to a private collection agency.
The collection agency will assign a caseworker who will mail an initial contact letter. If you do not respond, they may follow up by phone and/or email.
If the debt remains unpaid, the case will be sent back to the tax division. The state will then file a Certificate of Debt (COD) with the NJ Superior Court. This is equivalent to a civil judgment against you and creates a tax lien on your real and personal property.
Once the COD is secured, the state will move to enforcement actions, such as:
- Wage garnishment
- Bank levy
- Tax refund offsets
- Asset seizure
Notice of Deficiency sent to taxpayer
Account moved to collection agency
COD filed and enforcement begins
New Jersey State Tax Relief Options
New Jersey offers a few relief options, including:
- Payment Plans – If you can’t pay your tax bill on time, you may be eligible to pay over several months (up to 60) through a payment plan.
- Penalty Abatement – If you can show reasonable cause for filing or paying late, the state will consider reducing or waiving your penalty fees.
If you’re experiencing financial hardship and can’t pay your New Jersey income tax bill, contact the Division of Taxation as soon as possible to avoid collection actions.
When to Seek Tax Relief Help
If you’re experiencing any of the following, it may be time to explore your tax relief options:
You’re Receiving Collection Notices
Ignoring New Jersey tax notices can lead to more serious collection actions, so it’s often best to address the issue early.
You Can’t Afford to Pay Your Taxes
If paying your New Jersey state tax bill in full isn’t realistic, there may be payment or resolution options available.
Collection Actions Have Started
If you’re facing wage garnishments, bank levies, or tax liens, professional guidance may help you understand your options.
The sooner you address your tax debt, the more options you may have available to resolve your balance and minimize additional collection actions.
New Jersey Tax Relief FAQs
New Jersey Tax Resources
If you need assistance preparing your New Jersey state taxes, you can speak with a tax professional from Tax Defense Network by calling 855-476-6920.
You can also visit the New Jersey Division of Taxation website for additional resources.
- Pay Your Taxes
- Individual Income Tax Forms
- Where’s My Refund?
- Customer Service: 609-292-6400
