New Jersey state taxes at a glance
| Individual income tax | Graduated (bracket) income tax |
|---|---|
| Rate structure | Graduated rates from 1.4% up to 10.75% on income above $1 million in Tax Foundation’s 2026 table, with different bracket widths for single and joint filers. Verify current-year figures. |
| Tax agency | New Jersey Division of Taxation |
| Main individual return | Form NJ-1040 (residents); Form NJ-1040NR (nonresidents) |
| Local income taxes | No local income taxes. Property taxes are billed by municipalities, counties and school districts. |
| Sales tax | A 6.625% state rate with no local sales taxes, except that businesses in certain Urban Enterprise Zones collect sales tax at half the state rate. |
| Property tax | Billed by local governments and among the highest in the country by amount. The state offers property tax relief programs such as ANCHOR (for homeowners and renters), Senior Freeze and Stay NJ. |
| Retirement & Social Security | New Jersey does not tax Social Security benefits. Pension and IRA income has a partial exclusion for older filers that depends on age and income; check the Division of Taxation. |
Verify current-year figures: state rates, brackets, credits and filing rules change. Treat this page as a starting orientation and confirm details on the New Jersey Division of Taxation website.
How New Jersey income tax works
New Jersey’s gross income tax is graduated with seven brackets for single filers (and eight for joint filers) in Tax Foundation’s 2026 table: from 1.4% on the first $20,000 up to 10.75% on income above $1 million. Joint filers use different bracket widths in the middle of the table, so married couples should use the NJ-1040 instructions rather than a single-filer chart. New Jersey uses its own definition of income rather than starting from federal AGI, and it allows only a limited set of deductions (Tax Foundation lists a $1,000 personal exemption for single filers and $1,500 per dependent).
New Jersey’s sales tax is 6.625% statewide with no local add-ons, but qualifying sellers in Urban Enterprise Zones collect tax at half the state rate, according to Tax Foundation. The larger local cost for homeowners is property tax. The Division of Taxation runs separate programs to help: ANCHOR (for homeowners with gross income up to $250,000 and renters up to $150,000), Senior Freeze and Stay NJ. These require an application, which the Division said is due by November 2, 2026 for the current relief cycle, so check the Division’s property tax relief pages for deadlines.
For commuters, New Jersey has a reciprocal agreement with Pennsylvania (per Tax Foundation’s reciprocity table), so Pennsylvania residents who work in New Jersey generally owe tax only to Pennsylvania, and vice versa. Residents who work in New York or other neighboring states usually file in both states and claim a credit for tax paid to the other state. For general background on federal brackets, see how tax brackets work.
Filing your New Jersey return and free options
The Division of Taxation offers a free online filing service for the current-year NJ-1040 resident return, available through the NJ Division of Taxation portal. The service saves your progress and asks for prior-year New Jersey gross income to access e-filing. The standard filing deadline matches the federal deadline (April 15 in most years). For federal filing options, see our free filing hub and Free File Fillable Forms.
Applications for ANCHOR, Senior Freeze and Stay NJ are separate from the income tax return and are filed online through the Division’s property tax relief pages. If you cannot pay, see what to do if you can’t pay. Track your refund with state refund status guidance.
For the federal side, see our guides to free federal filing options and the complete guide to filing taxes.
Things New Jersey residents often ask about
- Property tax relief is a separate application: ANCHOR, Senior Freeze and Stay NJ are not claimed on the NJ-1040.
- Joint filers use different bracket widths: check the instructions for your filing status.
- Urban Enterprise Zones: some sellers collect sales tax at half the state rate.
- Pennsylvania reciprocity: residents of either state working in the other generally file at home only.
- Family leave payroll items: New Jersey payroll deductions for disability and family leave are separate from income tax.
Official New Jersey links
- New Jersey Division of Taxation
- New Jersey: NJ-1040 online filing
- New Jersey: property tax relief programs
- Federation of Tax Administrators: State tax agencies
Frequently asked questions
Can I file my New Jersey return for free?
Yes. The Division of Taxation offers a free online filing service for the resident NJ-1040.
What is ANCHOR?
A New Jersey property tax relief program for eligible homeowners and renters. Eligibility includes homeowners with income up to $250,000 and renters up to $150,000; you apply separately from your return.
Does New Jersey have reciprocity with Pennsylvania?
Yes. Residents of either state who work in the other generally owe tax only to their home state, according to Tax Foundation’s reciprocity table.
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.