New Jersey has a reputation. People think of the Shore, the Sopranos, and, unfortunately, some of the highest taxes in the country. If you live in the Garden State, you probably feel that pinch every time you look at your pay stub. Honestly, it's a lot to keep track of. But when we talk about nj income tax brackets 2024, things are actually a bit more nuanced than just "taxes are high."
The state uses a progressive system. This basically means the more you earn, the higher the percentage you pay on those extra dollars. It isn't a flat rate where everyone loses the same slice of the pie. For the 2024 tax year—which are the returns you’re likely filing right now in early 2026—the rates still range from a tiny 1.4% all the way up to a hefty 10.75%.
How the Brackets Actually Work for You
A common mistake people make is thinking that if they move into a higher bracket, all their money is now taxed at that higher rate. That’s not how it works at all. Only the money within that specific range gets hit with the higher percentage.
Let's look at the numbers for Single filers or Married people filing separately.
If you make $20,000 or less, you're in the 1.4% group. Simple enough. Once you cross that $20,000 mark, the money between $20,001 and $35,000 is taxed at 1.75%.
It keeps climbing from there. For income between $35,001 and $40,000, the rate jumps to 3.5%. Then it hits 5.525% for everything between $40,001 and $75,000.
Most middle-class earners in Jersey find themselves in the next tier. If you earn between $75,001 and $500,000, that portion of your income is taxed at 6.37%.
Then we get into the "millionaire tax" territory. Income from $500,001 to $1,000,000 is taxed at 8.97%. Anything over a million? That’s where the 10.75% rate kicks in.
What About Families and Joint Filers?
If you’re married and filing jointly, or if you're a head of household, the brackets shift a little to be more "forgiving" at the lower ends.
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For these filers, the 1.4% rate still applies to the first $20,000. But the 1.75% rate covers a much wider range—all the way up to $50,000.
The middle tiers for joint filers look like this:
- $50,001 to $70,000: 2.45%
- $70,001 to $80,000: 3.5%
- $80,001 to $150,000: 5.525%
- $150,001 to $500,000: 6.37%
After $500,000, the rates for joint filers match the single filers: 8.97% up to a million, and 10.75% for everything beyond that.
Credits That Actually Put Money Back
Brackets are only half the story. The New Jersey Division of Taxation offers a few "carrots" to balance out the "sticks."
One big one for 2024 is the Child Tax Credit. If you live in NJ and make $80,000 or less, you might get a credit for each child under age 6. Depending on exactly where your income falls, this can be anywhere from $200 to $1,000 per kid. It's a huge help for young families.
Then there's the Earned Income Tax Credit (NJEITC). For the 2024 tax year, this is roughly 40% of the federal EITC amount. If you have three or more qualifying children, that credit can reach over $3,100. It's refundable, which means if the credit is worth more than the tax you owe, the state sends you a check for the difference.
The ANCHOR Program: The Property Tax Relief Everyone Asks About
You can't talk about Jersey taxes without talking about property taxes. They are brutal. To help, the state has the ANCHOR program (Affordable New Jersey Communities for Homeowners and Renters).
Even though we're talking about income tax, ANCHOR is tied to it. For the 2024 cycle (based on 2021 residency), homeowners making $150,000 or less generally see a $1,500 benefit. If you make between $150k and $250k, it’s $1,000. Renters aren't left out either; if you make $150,000 or less, you can get $450.
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If you're 65 or older, the state adds another $250 on top of those amounts. It's one of the few ways the state tries to make staying in Jersey affordable for seniors.
Is Anything Nontaxable?
Believe it or not, yes.
New Jersey is actually pretty kind to retirees compared to some other high-tax states. If you're 62 or older and your total income is $150,000 or less, you can exclude a significant chunk of your pension or retirement income.
Also, social security benefits are not taxed by the state of New Jersey. That's a common misconception. While the feds might take a piece of your social security check, Trenton stays away from it.
Military pay for New Jersey residents stationed outside the state is often exempt too, though you usually still have to file a return to prove it.
Some Nuance for Multi-State Workers
If you live in Jersey but work in New York or Philly, things get messy.
Jersey and Pennsylvania have a "reciprocal agreement." This means if you live in NJ and work in PA, you only pay NJ income tax on your wages. You just file a form with your PA employer and you're good.
New York? Not so much. New York will tax you for working there, and then New Jersey will tax you because you live here. To prevent you from being totally broke, NJ gives you a credit for the taxes you paid to New York. It doesn't always wash out perfectly, but it prevents double taxation on the same dollar.
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A Few Surprising Details
Did you know the "Millionaire’s Tax" was actually meant to be temporary once upon a time? Now it's a permanent fixture of the nj income tax brackets 2024.
Another weird one: "Difficulty of Care" payments. If you're a caregiver getting paid through a State Medicaid program to look after someone in your home, New Jersey recently clarified that this money isn't part of your gross income. You don't pay state tax on it.
Actionable Steps for Tax Season
Don't just stare at the brackets and sigh.
First, check if you're eligible for the "Senior Freeze." If you're 65 or older or disabled, and you've lived in NJ for at least 10 years, you might be able to "freeze" your property tax amount so it doesn't keep climbing every year. The income limit for this recently jumped to $150,000, which opened it up to way more people.
Second, use the free filing options. If your income is below a certain threshold, the NJ Division of Taxation has an online portal that is actually pretty decent. It saves you the $50 or $100 you'd spend on commercial software.
Lastly, double-check your "Use Tax." If you bought stuff online and weren't charged sales tax (which is rare now, but happens), you're technically supposed to report that on your income tax return. Most people ignore it, but the state has been getting stricter about checking.
Closing Thoughts on the 2024 Tax Year
The reality is that nj income tax brackets 2024 are designed to hit high earners hard while providing a bit of a safety net for lower and middle-income residents. Between the ANCHOR rebates, the Child Tax Credit, and the pension exclusions, there are ways to lower that final bill. Just make sure you aren't leaving money on the table by missing the credits you've earned.
Make sure you have your W-2s and 1099s ready, and if you haven't received your ANCHOR benefit confirmation yet, check the state's status portal. Every bit helps when you're living in one of the most expensive spots in the country.