New Jersey Income Tax: High Rates, High Property Taxes, and Important Credits
New Jersey has one of the most complex and high-burden tax environments in the nation. The state’s top income tax rate of 10.75% applies to incomes over $1 million, and the 6.37% bracket — which kicks in at $75,001 — affects most professional earners. Combined with the nation’s highest average property taxes, NJ’s total tax burden ranks near the top in every analysis.
New Jersey Income Tax Brackets (2026, Single)
| Taxable Income | Rate |
|---|---|
| $0 – $20,000 | 1.4% |
| $20,001 – $35,000 | 1.75% |
| $35,001 – $40,000 | 3.5% |
| $40,001 – $75,000 | 5.525% |
| $75,001 – $500,000 | 6.37% |
| $500,001 – $1,000,000 | 8.97% |
| Over $1,000,000 | 10.75% |
Total Tax Burden: NJ vs. Neighboring States
| Category | New Jersey | New York | Pennsylvania | Connecticut |
|---|---|---|---|---|
| Income Tax (on $90K) | ~$4,200 | ~$4,600 | ~$2,760 | ~$4,500 |
| Property Tax ($400K home/yr) | ~$8,920 | ~$6,800 | ~$5,600 | ~$7,200 |
| Combined Annual Burden | ~$13,120 | ~$11,400 | ~$8,360 | ~$11,700 |
Real Scenario: The Patels in Bergen County
High income, high property — the NJ reality
The Patels live in Bergen County, NJ, earning a combined $105,000. Their NJ income tax: approximately $5,100. Their $520,000 home carries Bergen County’s average effective property tax rate (~2.23%), generating $11,600/year in property tax. Their combined state income + property tax burden: $16,700/year — placing them among the highest-taxed homeowners in the country by dollar amount.
This is why New Jersey consistently leads national rankings for highest property tax burden. According to NJ Division of Taxation, the average NJ property tax bill exceeds $9,800/year — the highest in the nation.
Key NJ Tax Benefits Worth Knowing
- NJ Earned Income Tax Credit. New Jersey’s EITC is 40% of the federal credit — one of the most generous state matches in the country. Low-to-moderate income families can significantly reduce their NJ tax bill.
- Property Tax Deduction / Credit. NJ allows a deduction of up to $15,000 for property taxes paid, or a $50 property tax credit for renters — modest offsets against NJ’s famously high property taxes.
- Homestead Benefit. The NJ Homestead Benefit program provides direct property tax relief credits for eligible homeowners based on income and property tax paid.
- Social Security exempt. New Jersey does not tax Social Security income, offering relief to retirees with fixed income.
- Pension exclusion for seniors. Taxpayers 62+ with income under $150,000 can exclude a portion of pension and retirement income from NJ income tax.
New Jersey Tax Authority
For official NJ income tax forms, property tax relief programs, and EITC eligibility, visit the NJ Division of Taxation at nj.gov/treasury/taxation. New Jersey income tax returns (NJ-1040) are due April 15.
New Jersey State Income Tax: What You Need to Know
New Jersey levies a state income tax on its residents. The state uses 7 brackets: 1.4% to 10.75% with a top marginal rate of 10.75%. This state tax is in addition to the federal income tax, which has seven brackets ranging from 10% to 37% for the 2026 tax year.
New Jersey has one of the highest top income tax rates in the nation and a progressive system with seven brackets.
To calculate your total income tax burden in New Jersey, you need to consider both federal and state taxes. Your federal tax is calculated on your taxable income after the standard deduction ($15,000 for single filers, $30,000 for married filing jointly in 2026). Your New Jersey state tax is then calculated separately based on New Jersey's own brackets and rules.
How New Jersey Income Tax Compares
New Jersey's top rate of 10.75% is above the national average for states that levy an income tax. For context, the highest state income tax rate in the nation is California's 13.3%, while the lowest non-zero flat rate is Pennsylvania's 3.07%.
9 states currently have no broad-based state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. If you're comparing tax burdens across states, remember to also consider sales tax, property tax, and the overall cost of living.
Federal Income Tax Brackets for 2026
Regardless of which state you live in, all U.S. residents are subject to federal income tax. The 2026 federal tax brackets for single filers are:
- 10% — Income up to $11,600
- 12% — $11,601 to $47,150
- 22% — $47,151 to $100,525
- 24% — $100,526 to $191,950
- 32% — $191,951 to $243,725
- 35% — $243,726 to $609,350
- 37% — Over $609,350
The standard deduction for 2026 is $15,000 for single filers and $30,000 for married filing jointly. Use our federal income tax calculator to see exactly how much you owe and how your income is taxed across each bracket.
Tips to Reduce Your New Jersey Tax Bill
- Maximize retirement contributions — 401(k) and IRA contributions reduce your taxable income for both federal and most state returns.
- Use tax-advantaged accounts — HSAs and FSAs lower your taxable income while covering healthcare and dependent care costs.
- Claim all deductions — Review New Jersey's specific deductions and credits, which may differ from federal rules.
- Consider filing status — Married Filing Jointly often results in lower taxes thanks to wider brackets and a larger standard deduction.
Frequently Asked Questions
Does New Jersey have a state income tax?
Yes, New Jersey has a state income tax with 7 brackets: 1.4% to 10.75% and a top rate of 10.75%.
How do I calculate my total income tax in New Jersey?
Calculate your federal income tax using our calculator, then add your New Jersey state tax based on New Jersey's brackets and rates. The combined amount is your total income tax obligation.