Positive Tax Changes in NJ
- Nov 6, 2018
Several recent tax developments have made the Garden State a better place in which to live and do business. Barbara Taibi, EisnerAmper partner and NJ Summit chair, talks about the increase in the pension/retirement income exclusion, sunset of the estate tax, and a tax rate increase to those earning $5 million+ versus the originally proposed $1 million+.
Hi, my name is Barbara Taibi and I'm a partner at EisnerAmper. I'm also chair of the New Jersey Business Summit. The theme of our 2018 New Jersey Business Summit was “New Jersey and You, Still Perfect Together.” Many people are out there talking about a few of the tax reform changes that may really hurt residents in the tri-state area, but I'd like to focus on some of the good observations about New Jersey. First, we do have a pension exclusion that began in 2017.
Retirement income is excluded from New Jersey gross income for any married couples with gross income of less than $100,000. That amount was $60,000 excluded in 2017, and it will increase to $100,000 in 2020. There also is no longer an estate tax. I know that we often hear about the exodus of wealthy families to a non-tax state, but I can tell you this, it really was not the state income tax that had families worried, it was the old New Jersey estate tax that was paid on anything with an estate value of more than $675,000. As of January 1, 2018, there is no longer a New Jersey estate tax, so it really is a great place to die. Also, the millionaire tax rate increase, originally thought to become law and increase the tax rate for gross income of more than $1 million, did not pass. Instead, there will only be a rate increase for New Jersey gross income of more than $5 million dollars. Everything under that remains at the current tax rates, which is a huge relief for our wealthy clients. So, I'm hoping you see that New Jersey continues to be a great place in which to live and work.
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Barbara Taibi is a Partner in the Private Client Services Group with years of public accounting and income tax planning and tax return preparation experience. Barbara focuses on helping clients plan for and meet their financial and tax goals.
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