TRENTON — Motorists may be fuming over having to pay 23 cents a gallon more at the pump come November, but the deal to restore New Jersey transportation funding will bring significant savings to retired residents living in the Garden State.
Legislation signed by Gov. Chris Christie last week raising the gasoline tax 23 cents per gallon included $1.4 billion in tax cuts. That includes a five-fold increase in the income tax break for retirees. Right now, married couples filing jointly can get out of paying any state income tax for their first $20,000 in retirement income. That will jump to $100,000 by 2020.
The limit for a married couple filing jointly will jump from $20,000 to $40,000 in 2017, to $60,000 in 2018, to $80,000 in 2019 and $100,000 in 2020. For a married person filing separately, it will gradually increase from $10,000 to $50,000, and for a individual filing as a single taxpayer, from $15,000 to $75,000.
Anyone with more than $100,000 in taxable New Jersey income would have to pay the full state income tax. The tax break applies to residents 62 and older.
So, if your NJ income is over $100,000, you do not get any part of the exclusion. There is no phase-out. It is all or none. I just wanted to make sure we were all clear on that. I am already getting calls from folks that are evaluating moving to PA, but wanted to stay in NJ because their pension was going to have this large exclusion. Not the case if their total income is over $100k.