Signed by Governor Phil Murphy

Vote Smart's Synopsis:

Vote to pass a bill that increases gross income tax rate from 8.97 percent to 10.75 percent on income between $1 million and $5 million and provides a maximum of $500 in tax rebate eligibility.

Highlights:

• Specifies that for married individuals filing a joint return and individuals filing as head of household, or as the surviving spouse, for federal income tax purposes for taxable years beginning on or after January 1st, 2020 (Sec. 1);

• If the taxable income is not over $20,000, the tax is 1.4 percent of taxable income,

• If the taxable income is over $20,000 but not over $50,000, the tax is $280 plus 1.75 percent of the excess over $20,000;

• If the taxable income is over $50,000 but not over $70,000, the tax is $805 plus 2.45 percent of the excess over $50,000;

• If the taxable income is over $70,000 but not over $80,000, the tax is $1,295.50 plus 3.5 percent of the excess over $70,000;

• If the taxable income is over $80,000 but not over $150,000, the tax is $1,645 plus 5.525 percent of the excess over $80,000;

• If the taxable income is over $150,000 but not over $500,000, the tax is $5,512.50 plus 6.37 percent of the excess over $150,000;

• If the taxable income is over $500,000 but not over $1 million, the tax is $27,807.50 plus 8.970 percent of the excess over $500,000; and

• If the taxable income is over $1 million, the tax is $72,657.50 plus 10.75 percent of the excess over $1 million.

• Specifies that for married individuals filing separately, unmarried individuals other than individuals filing as head of household or as a surviving spouse for federal income tax purposes, and estates and trusts for taxable years beginning on or after January 1st, 2020 (Sec. 1):

• If the taxable income is not over $20,000, the tax is 1.4 percent of taxable income;

• If the taxable income is over $20,000 but not over $35,000., the tax is $280 plus 1.75 percent of the excess over $20,000;

• If the taxable income is over $35,000 but not over $40,000, the tax is $542.5 plus 3.5 percent of the excess over $35,000;

• If the taxable income is over $40,000 but not over $75,000, the tax is $717.5 plus 5.525 percent of the excess over $40,000;

• If the taxable income is over $75,000 but not over $500,000, the tax is $2,651.25 plus 6.37 percent of the excess over $75,000;

• If the taxable income is over $500,000 but not over $1 million, the tax is $29,723.75 plus 8.97 percent of the excess over $500,000; and

• If the taxable income is over $1,000,000, the tax is $74,573.75 plus 10.75 percent of the excess over $1 million.

• Specifies that for the 2020 taxable year, withholding by an employer from salaries, wages, and other remuneration paid by an employer for services rendered between $1 million and$5 million will be at the rate of 21.3 percent as soon as practicable, but no later than November 1, 2020 (Sec. 2).

• Prohibits additions to tax or penalty imposed to a taxpayer for the 2020 taxable year for underpayment of increased estimated tax on taxable income received before November 1, 2020 (Sec. 2).

• Prohibits interest, penalties, or other costs for the 2020 taxable year to be imposed upon an employer maintaining an office or transacting business within this state and making payment of any salaries, wages, and remuneration subject to the “New Jersey Gross Income Tax Act,” or making payment of any remuneration for employment subject to contribution under the New Jersey unemployment compensation law for insufficient withholding of salaries, wages, and other remuneration paid before November 1, 2020, that is attributable to an increase in the rate imposed on gross income between $1 million $5 million (Sec. 2).

• Establishes eligibility for qualified taxpayers to receive a tax rebate of up to $500 or an amount equal to the amount of tax paid after credits for the taxable year (Sec. 3).

• Defines “qualified taxpayer” as an individual who had completed a resident return within the allotted time, is a resident of New Jersey during the taxable year, and (Sec. 3)

• Has at least one qualifying child,

• Gross income less than $150,000 for married individuals filing a joint return or an individual filing as head of household or as a surviving spouse,

• Gross income less than $75,000 for married individuals filing separately or an individual filing as a single taxpayer and,

• A gross income tax liability greater than zero.

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that increases gross income tax rate from 8.97 percent to 10.75 percent on income between $1 million and $5 million and provides a maximum of $500 in tax rebate eligibility.

Highlights:

• Specifies that for married individuals filing a joint return and individuals filing as head of household, or as the surviving spouse, for federal income tax purposes for taxable years beginning on or after January 1st, 2020 (Sec. 1);

• If the taxable income is not over $20,000, the tax is 1.4 percent of taxable income,

• If the taxable income is over $20,000 but not over $50,000, the tax is $280 plus 1.75 percent of the excess over $20,000;

• If the taxable income is over $50,000 but not over $70,000, the tax is $805 plus 2.45 percent of the excess over $50,000;

• If the taxable income is over $70,000 but not over $80,000, the tax is $1,295.50 plus 3.5 percent of the excess over $70,000;

• If the taxable income is over $80,000 but not over $150,000, the tax is $1,645 plus 5.525 percent of the excess over $80,000;

• If the taxable income is over $150,000 but not over $500,000, the tax is $5,512.50 plus 6.37 percent of the excess over $150,000;

• If the taxable income is over $500,000 but not over $1 million, the tax is $27,807.50 plus 8.970 percent of the excess over $500,000; and

• If the taxable income is over $1 million, the tax is $72,657.50 plus 10.75 percent of the excess over $1 million.

• Specifies that for married individuals filing separately, unmarried individuals other than individuals filing as head of household or as a surviving spouse for federal income tax purposes, and estates and trusts for taxable years beginning on or after January 1st, 2020 (Sec. 1):

• If the taxable income is not over $20,000, the tax is 1.4 percent of taxable income;

• If the taxable income is over $20,000 but not over $35,000., the tax is $280 plus 1.75 percent of the excess over $20,000;

• If the taxable income is over $35,000 but not over $40,000, the tax is $542.5 plus 3.5 percent of the excess over $35,000;

• If the taxable income is over $40,000 but not over $75,000, the tax is $717.5 plus 5.525 percent of the excess over $40,000;

• If the taxable income is over $75,000 but not over $500,000, the tax is $2,651.25 plus 6.37 percent of the excess over $75,000;

• If the taxable income is over $500,000 but not over $1 million, the tax is $29,723.75 plus 8.97 percent of the excess over $500,000; and

• If the taxable income is over $1,000,000, the tax is $74,573.75 plus 10.75 percent of the excess over $1 million.

• Specifies that for the 2020 taxable year, withholding by an employer from salaries, wages, and other remuneration paid by an employer for services rendered between $1 million and$5 million will be at the rate of 21.3 percent as soon as practicable, but no later than November 1, 2020 (Sec. 2).

• Prohibits additions to tax or penalty imposed to a taxpayer for the 2020 taxable year for underpayment of increased estimated tax on taxable income received before November 1, 2020 (Sec. 2).

• Prohibits interest, penalties, or other costs for the 2020 taxable year to be imposed upon an employer maintaining an office or transacting business within this state and making payment of any salaries, wages, and remuneration subject to the “New Jersey Gross Income Tax Act,” or making payment of any remuneration for employment subject to contribution under the New Jersey unemployment compensation law for insufficient withholding of salaries, wages, and other remuneration paid before November 1, 2020, that is attributable to an increase in the rate imposed on gross income between $1 million $5 million (Sec. 2).

• Establishes eligibility for qualified taxpayers to receive a tax rebate of up to $500 or an amount equal to the amount of tax paid after credits for the taxable year (Sec. 3).

• Defines “qualified taxpayer” as an individual who had completed a resident return within the allotted time, is a resident of New Jersey during the taxable year, and (Sec. 3)

• Has at least one qualifying child,

• Gross income less than $150,000 for married individuals filing a joint return or an individual filing as head of household or as a surviving spouse,

• Gross income less than $75,000 for married individuals filing separately or an individual filing as a single taxpayer and,

• A gross income tax liability greater than zero.

Full Bill Text