Key Takeaways
• New Jersey’s 2025 state income tax rates range from 1.4% to 10.75%, unchanged from previous years.
• Residents earning over $10,000 (single) or $20,000 (married filing jointly) must file a state tax return.
• The progressive tax system charges higher rates only on income portions within each bracket threshold.
As of July 4, 2025, New Jersey continues to use a progressive state income tax system with rates and tax brackets that directly affect millions of residents, including immigrants, long-term citizens, and newcomers. The state income tax rates for the 2025 tax year, which people will file in 2026, remain unchanged from previous years. This stability is important for families, workers, and employers planning their finances and understanding their obligations to the state.
Who is affected? Every resident of New Jersey who earns more than $10,000 as an individual or $20,000 as a married couple filing jointly must file a state income tax return. This includes U.S. citizens, green card holders, and many immigrants living and working in the state. The tax brackets and rates determine how much each person or household pays, depending on their income and filing status.
What are the rates and brackets? New Jersey’s state income tax rates for 2025 range from 1.4% to 10.75%, with the highest rate applying to income over $1 million. The system is designed so that as your income increases, the rate you pay on each additional dollar also increases. This is called a “progressive” tax system.
Where and when do these rules apply? These tax rates and brackets apply to all income earned in New Jersey during the 2025 calendar year. Taxpayers will use these rates when they file their state tax returns in 2026.
Why does this matter? Understanding the state income tax rates and tax brackets is essential for everyone living or working in New Jersey. It helps people plan for how much money they will keep after taxes, avoid surprises at tax time, and take advantage of any credits or deductions they may qualify for.
How does the system work? The progressive structure means that only the income above each bracket’s threshold is taxed at the higher rate. For example, if your income moves into a higher bracket, only the portion above that bracket’s lower limit is taxed at the new rate—not your entire income.
Let’s break down the details, explain what each bracket means, and look at what this means for different groups in New Jersey.
New Jersey State Income Tax Rates and Brackets for 2025
New Jersey’s tax system uses different brackets depending on your filing status. There are seven brackets for single filers and married people filing separately, and eight brackets for married couples filing jointly, heads of household, or qualifying surviving spouses/civil union partners.
Tax Brackets for Single Filers and Married Filing Separately
- 1.4% on income from $0 to $20,000
- 1.75% on income from $20,001 to $35,000
- 3.5% on income from $35,001 to $40,000
- 5.525% on income from $40,001 to $75,000
- 6.37% on income from $75,001 to $500,000
- 8.97% on income from $500,001 to $1,000,000
- 10.75% on income over $1,000,000
Tax Brackets for Married Filing Jointly, Head of Household, or Qualifying Surviving Spouse
- 1.4% on income from $0 to $20,000
- 1.75% on income from $20,001 to $50,000
- 2.45% on income from $50,001 to $70,000
- 3.5% on income from $70,001 to $80,000
- 5.525% on income from $80,001 to $150,000
- 6.37% on income from $150,001 to $500,000
- 8.97% on income from $500,001 to $1,000,000
- 10.75% on income over $1,000,000
Key Point: The extra 2.45% bracket for income between $50,001 and $70,000 only applies to married couples filing jointly and similar statuses. This makes the tax system a bit more gradual for families.
How the Progressive Tax System Works
A progressive tax system means that as your income goes up, the rate you pay on each extra dollar also goes up. But you don’t pay the higher rate on your whole income—just on the part that falls into each bracket.
Example for a Single Filer:
– If you earn $45,000 in 2025:
– The first $20,000 is taxed at 1.4%
– The next $15,000 ($20,001 to $35,000) is taxed at 1.75%
– The next $5,000 ($35,001 to $40,000) is taxed at 3.5%
– The last $5,000 ($40,001 to $45,000) is taxed at 5.525%
This method helps lower-income earners pay a smaller share of their income in taxes, while higher earners pay more on the income above each threshold.
Filing Requirements and Who Must File
New Jersey residents must file a state income tax return if their income is above:
– $10,000 for single filers, heads of household, or married filing separately
– $20,000 for married couples filing jointly, civil union partners, or qualifying surviving spouses
This rule applies to everyone living in New Jersey, including immigrants who are considered residents for tax purposes. If you are a nonresident but earned income in New Jersey, you may also need to file a return.
Credits, Deductions, and Exemptions
While the base tax rates and brackets are set, New Jersey offers several ways to lower your tax bill:
- Personal exemptions: You can claim a certain amount for yourself, your spouse, and dependents, which reduces your taxable income.
- Tax credits: These directly reduce the amount of tax you owe. Common credits include the Earned Income Tax Credit (EITC), property tax deduction/credit, and credits for taxes paid to other states.
- Deductions: Some expenses, like medical costs or contributions to certain savings plans, can be deducted from your income.
These options can make a big difference, especially for families, students, and lower-income workers.
Recent Developments and Stability in Tax Policy
As of mid-2025, there have been no changes to the state income tax rates or brackets for the 2025 tax year. The New Jersey Division of Taxation continues to use the same structure as in previous years. Refunds for 2024 tax returns are currently being processed, and the state has not announced any increases or new brackets.
This stability is important for planning. Families, business owners, and new arrivals to New Jersey can rely on these rates when making decisions about work, savings, and investments.
How New Jersey’s Tax System Compares Nationally
New Jersey’s top rate of 10.75% on income over $1 million is one of the highest in the United States 🇺🇸. Only a few other states have similar or higher top rates. This can affect where high-income earners choose to live or work.
At the same time, New Jersey also has:
– High property taxes (average rate of 2.08%)
– Sales tax of 6.625%
These factors combine to make the overall tax burden in New Jersey higher than in many other states. However, the state uses this revenue to fund public services, schools, and infrastructure.
Implications for Immigrants and New Residents
For immigrants and newcomers, understanding New Jersey’s state income tax rates and tax brackets is especially important. Many new residents may not be familiar with the U.S. tax system or the differences between federal and state taxes.
Key things to remember:
– You may need to file both a federal and a state tax return.
– Your immigration status can affect which forms you use and what income you must report.
– If you are a resident for tax purposes, you must report all income, even if some was earned outside the United States 🇺🇸.
– If you are a nonresident but earned money in New Jersey, you may still need to file a state return.
Practical steps for immigrants:
– Keep good records of your income and any taxes withheld from your paychecks.
– Learn about credits and deductions you may qualify for, such as the EITC or property tax relief.
– Use official resources, like the New Jersey Division of Taxation website, for up-to-date information, forms, and filing instructions.
Policy Background and Ongoing Debates
New Jersey’s progressive tax structure has been in place for many years. The top bracket of 10.75% for millionaires was added to help the state raise more money from those with the highest incomes. This move is often debated:
- Supporters say it helps fund important services and makes the tax system fairer.
- Critics argue it may push high earners to move to other states with lower taxes.
Despite these debates, the state has not made major changes to the brackets or rates in recent years. Lawmakers continue to discuss possible reforms, especially to help middle-income families, but as of 2025, no new laws have passed.
How Tax Brackets Affect Different Groups
For Low- and Middle-Income Workers
- The lowest rates (1.4% and 1.75%) apply to the first $20,000 or $50,000 of income, depending on filing status.
- Many workers in this group may also qualify for credits and deductions, reducing their tax bill further.
- The progressive system means they pay a smaller share of their income in taxes compared to higher earners.
For High-Income Earners
- The top rate of 10.75% applies only to income over $1 million.
- High earners may pay a large amount in state income tax, especially when combined with property and sales taxes.
- Some may consider moving to states with lower taxes, but others stay for family, work, or lifestyle reasons.
For Immigrants and Newcomers
- Understanding the tax brackets helps avoid mistakes and penalties.
- Many immigrants may be surprised by the need to file both federal and state returns.
- Access to credits and deductions can help lower the overall tax burden.
Filing Your New Jersey State Income Tax Return
To file your state income tax return, you’ll need to gather:
– Proof of income (W-2s, 1099s, etc.)
– Social Security Number or Individual Taxpayer Identification Number (ITIN)
– Records of any taxes already paid to New Jersey or other states
– Information about dependents, if any
You can file online, by mail, or with the help of a tax professional. The New Jersey Division of Taxation provides forms, instructions, and an online filing portal. For official forms and guidance, visit the New Jersey Division of Taxation website.
What to Watch for in the Future
While the 2025 tax year brings no changes to the state income tax rates or brackets, it’s always wise to stay informed. Lawmakers sometimes propose new tax laws, especially during budget debates. Changes could affect credits, deductions, or even the brackets themselves.
If you’re planning to move to New Jersey, start a business, or change jobs, keep an eye on official announcements. According to analysis by VisaVerge.com, staying up to date with state tax policy is especially important for immigrants and international workers, who may face extra paperwork or special rules.
Actionable Takeaways
- Check your income against the 2025 tax brackets to estimate your state tax bill.
- File your return if your income is above $10,000 (single) or $20,000 (married filing jointly).
- Explore credits and deductions that can lower your tax bill, especially if you have children, pay property taxes, or qualify for the EITC.
- Use official resources like the New Jersey Division of Taxation website for forms, instructions, and updates.
- Seek help from a tax professional if you’re unsure about your status, especially if you’re an immigrant or new to the U.S. tax system.
Final Thoughts
New Jersey’s state income tax rates and tax brackets for 2025 remain steady, giving residents and newcomers a clear picture of what to expect. The progressive system means most people pay a fair share based on their income, with higher earners contributing more. While the rates are among the highest in the United States 🇺🇸, the state uses this money to fund important services and infrastructure.
Whether you’re a long-time resident, a recent immigrant, or someone considering a move to New Jersey, understanding these tax rules is key to managing your finances and staying compliant with state law. Always use official sources for the latest information, and don’t hesitate to ask for help if you need it.
Learn Today
Progressive Tax System → A tax structure where higher income segments are taxed at higher rates incrementally.
Tax Bracket → An income range taxed at a specific rate in a progressive tax system.
Filing Status → The category taxpayers select that determines their tax rate and brackets, such as single or married.
Earned Income Tax Credit (EITC) → A refundable credit for low- to moderate-income workers, reducing federal and sometimes state taxes owed.
Tax Deduction → An expense subtracted from gross income to reduce taxable income and lower tax liability.
This Article in a Nutshell
New Jersey’s 2025 state income tax rates remain steady, ranging from 1.4% to 10.75%. Residents earning over thresholds must file returns. Understanding tax brackets helps plan finances. The progressive system ensures higher incomes pay higher rates only on amounts above bracket thresholds, benefiting both families and high earners nationwide.
— By VisaVerge.com
