Official Site of The State of New Jersey

Wages

If you are a New Jersey resident, wages you receive from all employers are subject to New Jersey Income Tax. Wages include salaries, tips, fees, commissions, bonuses, and any other payments you receive for services you perform as an employee. You must report all payments, whether in cash, benefits, or property.

The wages you report for federal tax purposes may be different than the wages you report for New Jersey purposes. For example:

• New Jersey does not allow you to exclude from wages amounts you contribute to deferred compensation and retirement plans, other than 401(k) Plans. Specific plans that New Jersey does not allow taxpayers to exclude contributions to include, but are not limited to, plans under I.R.C. § 403(b), I.R.C. § 457, 409A, I.R.C. § 414(h), SEP, Federal Thrift Savings Funds, or Individual Retirement Accounts. Employer contributions to these plans receive tax-deferred treatment. In addition, both employee and employer contributions to SIMPLE IRAs, SEP, and SARSEP plans are included in taxable wages (neither receive tax-deferred treatment).
• New Jersey does not allow you to deduct moving expenses or employee business expenses from wages, although you can exclude reimbursements for certain expenses if they are included in wages on your W-2.
• If you are considered a "statutory employee" for federal tax purposes, you cannot deduct your business expenses unless you are self-employed or an independent contractor under New Jersey law. The federal label of "statutory employee" has no meaning for New Jersey tax purposes.

Because of these and other differences, you must take the amount of wages from the “State wages” box on your W-2s (Box 16). Also check your W-2 to confirm that "New Jersey" or "NJ" appears in the "State" box. The "State Wages" figure on your W-2(s) from employment outside New Jersey may need to be adjusted to reflect New Jersey tax law.

For more information, see the New Jersey Income Tax return instructions.