Retiring in New Jersey: how your income is taxed
New Jersey is very tax-friendly for retirees. On a typical retirement income it ranks tied for #1 of 51 with 18 other states for the lowest state income tax.
Assumptions behind this comparison
The ranking uses a full-year resident, single filer age 67, with $30,000 Social Security, $20,000 private defined-benefit pension, $20,000 traditional IRA withdrawals under 2026 rules. It models a general private pension and traditional IRA withdrawals. Public or military pension exceptions, early-distribution penalties and itemized deductions require separate checking. Maryland and Indiana estimates include an approximate statewide-average county income tax; other local income taxes are not modeled. A state with no income tax differs from a state that exempts only specified retirement income.
The joint table uses two spouses age 67, with each income category split equally between them. Personal exclusions follow each spouse's own eligible income; some states instead allow a joint cap. The calculator initially assigns household income to you and lets you enter your spouse's actual age and share. Read the source instructions for your pension type.
The rules in New Jersey
- Social Security: Social Security is fully exempt and does not count toward the income limits for the pension exclusion.
- Pensions: At 62 and older (or if disabled), with total income of $100,000 or less, you can exclude up to $100,000 (joint), $75,000 (single or head of household) or $50,000 (married filing separately) of pension, annuity and IRA income. With income of $100,001 to $125,000 you can exclude 50%, 37.5% or 25% of it; at $125,001 to $150,000, 25%, 18.75% or 12.5%; above $150,000, nothing. The joint limit is per couple, not per person. Public and private pensions follow the same rules, and U.S. military pensions are excluded regardless of age or income.
- 401(k), 403(b) and IRA withdrawals: Taxable pension, annuity and IRA withdrawals share one exclusion: up to $100,000 (joint) or $75,000 (single) if total income is $100,000 or less, and a percentage of it up to $150,000 of income. At 62 and older, the unused allowance can also exclude your taxable interest and dividends if combined earned income is $3,000 or less. Only the eligible spouse's income qualifies. This calculator models interest and ordinary dividends without earned income; it does not include the additional special exclusion for people ineligible for Social Security.
- At 65 and older: Each filer 65 or older gets an extra $1,000 exemption.
Calculate your New Jersey retirement taxes
State income tax in New Jersey: $0 a year
In New Jersey, qualifying employer-plan withdrawals can receive the pension exclusion while traditional IRA withdrawals do not. Keep each account in its own field when changing state; the calculator applies the state-specific treatment.
The employer-plan field supports federally taxable private 401(k) / 403(b) retirement distributions owned by someone aged 60 or older. Earlier distributions and Hawaii, Mississippi or Pennsylvania employer-plan scenarios are not calculated; funding or plan retirement eligibility needs a separate check. Enter each amount once; do not include completed rollovers, Roth payments or special public/military plans.
Older shared links did not identify employer-plan withdrawals separately. Pension and IRA amounts have been left unchanged. If an old amount includes 401(k) or 403(b) withdrawals, move that portion into the employer-plan field before comparing states; the tool cannot infer the original account type.
Household totals include taxable private pensions and traditional retirement withdrawals. Other ordinary income means taxable interest and ordinary dividends; capital gains, qualified dividends, tax-exempt interest, wages, Roth distributions and special public or military pension rules need a separate calculation. Disability and survivor eligibility are not assessed by this tool. Age bands represent the listed ages for the full year; midyear eligibility and birth-date exceptions need checking.
Local income taxes are not modeled here, except the approximate statewide-average county rates included when you select Maryland or Indiana.
In New Jersey you'd pay about $0 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $65,664 (6.2% total).
New Jersey ranks tied for #1 of 51 with 18 other states for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in New Jersey
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 traditional IRA withdrawals | $0 | $0 | $0 |
| $30,000 Social Security, $20,000 private defined-benefit pension, $20,000 traditional IRA withdrawals | $0 | $0 | $4,336 |
| $40,000 Social Security, $40,000 private defined-benefit pension, $50,000 traditional IRA withdrawals, $10,000 other income | $333 | $0 | $19,812 |
Age 67, 2026 rules including the federal senior deduction. For the joint column, income is the household total, both spouses are 67, and each owns 50% of every income category. State estimates apply New Jersey's main exclusions and may differ for income-tested credits.
Moving to New Jersey in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to New Jersey come from (IRS migration data, 2022–2023).
- New York to New Jersey
- Pennsylvania to New Jersey
- Florida to New Jersey
- California to New Jersey
- Texas to New Jersey
- Massachusetts to New Jersey
Frequently asked questions
Does New Jersey tax Social Security?
Not taxed. Social Security is fully exempt and does not count toward the income limits for the pension exclusion.
Does New Jersey tax pensions?
Partly taxed. At 62 and older (or if disabled), with total income of $100,000 or less, you can exclude up to $100,000 (joint), $75,000 (single or head of household) or $50,000 (married filing separately) of pension, annuity and IRA income. With income of $100,001 to $125,000 you can exclude 50%, 37.5% or 25% of it; at $125,001 to $150,000, 25%, 18.75% or 12.5%; above $150,000, nothing. The joint limit is per couple, not per person. Public and private pensions follow the same rules, and U.S. military pensions are excluded regardless of age or income.
Does New Jersey tax 401(k) and IRA withdrawals?
Partly taxed. Taxable pension, annuity and IRA withdrawals share one exclusion: up to $100,000 (joint) or $75,000 (single) if total income is $100,000 or less, and a percentage of it up to $150,000 of income. At 62 and older, the unused allowance can also exclude your taxable interest and dividends if combined earned income is $3,000 or less. Only the eligible spouse's income qualifies. This calculator models interest and ordinary dividends without earned income; it does not include the additional special exclusion for people ineligible for Social Security.
Is New Jersey a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 private defined-benefit pension, $20,000 traditional IRA withdrawals, New Jersey charges about $0 in state income tax, ranking tied for #1 of 51 with 18 other states (lowest tax first).
Related
Sources: nj.gov, nj.gov (2), nj.gov (3). Rules reviewed .