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Division of Taxation

NJ Income Tax - Important Changes for 2020

Filing Deadline

The filing deadline is May 17, 2021, for calendar-year taxpayers – matching the due date for the federal Form 1040.

Fiscal year filers must file their returns by the 15th day of the fourth month following the close of the fiscal year. If a due date falls on a Saturday, Sunday, or legal holiday, that return is due on the following business day.

Tax Rate Increase

The New Jersey Gross Income Tax rate increased to 10.75% on income over $1 million. 

Retirement Income Exclusions

For Tax Year 2020, you may be eligible to exclude a maximum amount of pension and/or other retirement income of $100,000. See Income Exclusions for more information.


Form NJ-1040

Three lines have been added to the NJ-1040 for the 2020 return:

  • Line 36 - Organ/Bone Marrow Donation Deduction
  • Line 48 - Credit for Employer of Organ/Bone Marrow Donor
  • Line 63 - Pass-Through Business Alternative Income Tax Credit

Organ/Bone Marrow Donor Deduction/Credit

Deduction

If you donated an organ or bone marrow to another person for transplantation, you can deduct up to $10,000 of unreimbursed expenses for travel, lodging, and lost wages related to the donation. This deduction is also available to your spouse (if filing jointly) or any dependents you claim on your return.

Credit

If you are an employer who provided paid time off to an employee who missed work to donate an organ or bone marrow for transplantation, you may be able to claim a credit.

Earned Income Tax Credit

The New Jersey EITC amount increases to 40% of the federal Earned Income Tax Credit for 2020.

Residents who were not eligible for a federal EITC are eligible for an NJEITC of $215 if they met the following requirements during 2020:

  • Did not have a qualifying child; and
  • Were age 21 to 24 on the last day of the tax year; and
  • Met all federal EITC requirements except the minimum age requirement.

Credit for Excess UI/WF/SWF; DI; FLI Withheld

For 2020, the maximum employee unemployment insurance/workforce development partnership fund/supplemental workforce fund contribution was $150.03. The maximum employee disability insurance contribution was $350.74. The maximum employee family leave insurance contribution was $215.84. If you had two or more employers, you may have contributed more than the maximum amount(s). To claim credit on the tax return for excess withholding, complete Form NJ-2450. More information on UI/DI/FLI is available.

Credit for Taxes Paid to Other Jurisdictions

The Philadelphia nonresident wage tax rate for 2020 was 3.4481% (.034481) from January 1 to June 30, and 3.5019% (.035019) from July 1 to December 31.

Property Tax Relief Programs

Senior Freeze (Property Tax Reimbursement)

The Senior Freeze Program reimburses eligible senior citizens or disabled persons for property tax increases. Eligible residents must file a 2020 Senior Freeze application (Form PTR-1 or PTR-2) by November 1, 2021. The 2020 applications are expected to be mailed by late February. Updated information for the program is posted as it becomes available.


Last Updated: Thursday, 04/22/21