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A1185
ASSEMBLY, No. 1185
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblyman JOHN DIMAIO
District 23 (Hunterdon, Somerset and Warren)
Co-Sponsored by:
Assemblymen DePhillips, McGuckin, S.Kean, Clifton,
Peterson, Assemblywoman Dunn, Assemblymen McClellan, Guardian, Assemblywoman
Fantasia, Assemblyman Inganamort, Assemblywoman Flynn and Assemblyman
Scharfenberger
SYNOPSIS
���� Revises gross income tax rates for joint filers and
similar taxpayers and designated as Marriage Penalty Elimination Act.
CURRENT VERSION OF TEXT
���� Introduced Pending Technical Review by Legislative
Counsel.
��
An Act
revising the gross income tax rates for joint filers
and similar taxpayers and designated as the Marriage Penalty Elimination Act,
and amending N.J.S.54A:2-1.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� N.J.S.54A:2-1 is amended
to read as follows:
���� 54A:2-1.���� Imposition of
tax. There is hereby imposed a tax for each taxable year (which shall be the
same as the taxable year for federal income tax purposes) on the New Jersey
gross income as herein defined of every individual, estate or trust (other than
a charitable trust or a trust forming part of a pension or profit-sharing
plan), subject to the deductions, limitations and modifications hereinafter
provided, determined in accordance with the following tables with respect to
taxpayers' taxable income:
���� a.���� For married individuals
filing a joint return and individuals filing as head of household or as
surviving spouse for federal income tax purposes:
���� (1)�� for taxable years
beginning on or after January 1, 1991 but before January
1, 1994:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . ��������������� 2%
of taxable income
Over $20,000.00 but not
���� over $50,000.00 . . . . . ���������������� $400.00 plus 2.5% of the
excess over $20,000.00
Over $50,000.00 but not
���� over $70,000.00 . . . . . ���������������� $1,150.00 plus 3.5% of
the excess over $50,000.00
Over $70,000.00 but not
���� over $80,000.00 . . . . . ���������������� $1,850.00 plus 5.0% of
the excess over $70,000.00
Over $80,000.00 but not
���� over $150,000.00 . . . . . ������������� $2,350.00 plus 6.5% of the
excess over $80,000.00
Over $150,000.00 . . . . . . . . ����������� $6,900.00 plus 7.0% of the
excess over $150,000.00
���� (2)�� for taxable years
beginning on or after January 1, 1994 but before January
1, 1995:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . ����������������� 1.900%
of taxable income
Over $20,000.00 but not
���� over $50,000.00 . . . . ������������������ $380.00 plus 2.375% of
the excess over $20,000.00
Over $50,000.00 but not
���� over $70,000.00 . . . . ������������������ $1,092.50 plus 3.325% of
the excess over $50,000.00
Over $70,000.00 but not
���� over $80,000.00 . . . . ������������������ $1,757.50 plus 4.750% of
the excess over $70,000.00
Over $80,000.00 but not
���� over $150,000.00 . . . . ���������������� $2,232.50 plus 6.175% of
the excess over $80,000.00
Over $150,000.00 . . . . . . . ������������� $6,555.00 plus 6.650% of the
excess over $150,000.00
���� (3)�� for taxable years
beginning on or after January 1, 1995 but before January
1, 1996:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . ��������������� 1.700%
of taxable income
Over $20,000.00 but not
���� over $50,000.00 . . . . . ���������������� $340.00 plus 2.125% of
the excess over $20,000.00
Over $50,000.00 but not
���� over $70,000.00 . . . . . ���������������� $977.50 plus 2.975% of
the excess over $50,000.00
Over $70,000.00 but not
���� over $80,000.00 . . . . . ���������������� $1,572.50 plus 4.250% of
the excess over $70,000.00
Over $80,000.00 but not
���� over $150,000.00 . . . . . ������������� $1,997.50 plus 6.013% of
the excess over $80,000.00
Over $150,000.00 . . . . . . . ������������� $6,206.60 plus 6.580% of the
excess over $150,000.00
���� (4)�� for taxable years
beginning on or after January 1, 1996 but before January
1, 2004:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . . ������������� 1.400%
of taxable income
Over $20,000.00 but not
���� over $50,000.00 . . . . . ���������������� $280.00 plus 1.750% of
the excess over $20,000.00
Over $50,000.00 but not
���� over $70,000.00 . . . . . ���������������� $805.00 plus 2.450% of
the excess over $50,000.00
Over $70,000.00 but not
���� over $80,000.00 . . . . . ���������������� $1,295.50 plus 3.500% of
the excess over $70,000.00
Over $80,000.00 but not
���� over $150,000.00 . . . . . ������������� $1,645.00 plus 5.525% of
the excess over $80,000.00
Over $150,000.00 . . . . . . . . ����������� $5,512.50 plus 6.370% of the
excess over $150,000.00
���� (5)�� for taxable years
beginning on or after January 1, 2004 but before January 1, 2018:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . . . . ��������� 1.400%
of taxable income
Over $20,000.00 but not
���� over $50,000.00 . . . . . . . ����������� $280.00 plus 1.750% of the
excess over $20,000.00
Over $50,000.00 but not
���� over $70,000.00 . . . . . . . . ��������� $805.00 plus 2.450% of the
excess over $50,000.00
Over $70,000.00 but not
���� over $80,000.00 . . . . . . . ����������� $1,295.50 plus 3.500% of
the excess over $70,000.00
Over $80,000.00 but not
���� over $150,000.00 . . . . . . . ��������� $1,645.00 plus 5.525% of
the excess over $80,000.00
Over $150,000.00 but not
���� over $500,000.00 . . . . . . ����������� $5,512.50 plus 6.370% of
the excess over $150,000.00
Over $500,000.00 . . . . . . . . ����������� $27,807.50 plus 8.970% of
the excess over $500,000.00
���� (6)�� for taxable years
beginning on or after January 1, 2018
but before January 1, 2020
:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . . . . ��������� 1.400%
of taxable income
Over $20,000.00 but not
���� over $50,000.00 . . . . . . . ����������� $280.00 plus 1.750% of the
excess over $20,000.00
Over $50,000.00 but not
���� over $70,000.00 . . . . . . . . ��������� $805.00 plus 2.450% of the
excess over $50,000.00
Over $70,000.00 but not
���� over $80,000.00 . . . . . . . ����������� $1,295.50 plus 3.500% of
the excess over $70,000.00
Over $80,000.00 but not
���� over $150,000.00 . . . . . . . ��������� $1,645.00 plus 5.525% of
the excess over $80,000.00
Over $150,000.00 but not
���� over $500,000.00 . . . . . . ����������� $5,512.50 plus 6.370% of
the excess over $150,000.00
Over $500,000.00 but not
���� over $5,000,000.00 . . . . . . . . $27,807.50 plus 8.970% of the
excess over $500,000.00
Over $5,000,000.00 . . . . . . . . �������� $431,457.50 plus 10.75% of
the excess over $5,000,000.00
����
(7)�� for taxable years
beginning on or after January 1, 2020:
Not over $40,000.00 . . . . . .
. ��������� 1.400% of taxable income
Over $40,000.00 but not
����
over $70,000.00 . . . . . . . ����������� $560.00 plus 1.750% of
the excess over $40,000.00
Over $70,000.00 but not
����
over $80,000.00 . . . . . . . ����������� $1,085.00 plus 3.500%
of the excess over $70,000.00
Over $80,000.00 but not
����
over $150,000.00 . . . . . . . ��������� $1,435.00 plus 5.525% of
the excess over $80,000.00
Over $150,000.00 but not
����
over $500,000.00 . . . . . . ����������� $5,302.50 plus 6.370% of
the excess over $150,000.00
Over $500,000.00 but not
����
over $5,000,000.00 . . . . . . . . $27,597.50 plus 8.970% of the
excess over $500,000.00
Over $5,000,000.00 . . . . . . . . �������� $431,247.50 plus 10.75% of
the excess over $500,000.00
���� b.��� For married individuals
filing separately, unmarried individuals other than individuals filing as head
of household or as a surviving spouse for federal income tax purposes, and
estates and trusts:
���� (1)�� for taxable years
beginning on or after January 1, 1991 but before January
1, 1994:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . . ������������� 2%
of taxable income
Over $20,000.00 but not
���� over $35,000.00 . . . . . ���������������� $400.00 plus 2.5% of the
excess over $20,000.00
Over $35,000.00 but not
���� over $40,000.00 . . . . . ���������������� $775.00 plus 5.0% of the
excess over $35,000.00
Over $40,000.00 but not
���� over $75,000.00 . . . . . ���������������� $1,025.00 plus 6.5% of
the excess over $40,000.00
Over $75,000.00 . . . . . . . . ������������� $3,300.00 plus 7.0% of the
excess over $75,000.00
���� (2)�� for taxable years beginning on or after January 1, 1994 but
before January 1, 1995:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . . ������������� 1.900%
of taxable income
Over $20,000.00 but not
���� over $35,000.00 . . . . . ���������������� $380.00 plus 2.375% of
the excess over $20,000.00
Over $35,000.00 but not
���� over $40,000.00 . . . . . ���������������� $736.25 plus 4.750% of
the excess over $35,000.00
Over $40,000.00 but not
���� over $75,000.00 . . . . . ���������������� $973.75 plus 6.175% of
the excess over $40,000.00
Over $75,000.00 . . . . . . . . ������������� $3,135.00 plus 6.650% of
the excess over $75,000.00
���� (3)�� for taxable years
beginning on or after January 1, 1995 but before January
1, 1996:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . . ������������� 1.700%
of taxable income
Over $20,000.00 but not
���� over $35,000.00 . . . . . ���������������� $340.00 plus 2.125% of
the excess over $20,000.00
Over $35,000.00 but not
���� over $40,000.00 . . . . . ���������������� $658.75 plus 4.250% of
the excess over $35,000.00
Over $40,000.00 but not
���� over $75,000.00 . . . . . ���������������� $871.25 plus 6.013% of
the excess over $40,000.00
Over $75,000.00 . . . . . ������������������� $2,975.80 plus 6.580% of
the excess over $75,000.00
���� (4)�� for taxable years
beginning on or after January 1, 1996 but before January 1, 2004:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . . ������������� 1.400%
of taxable income
Over $20,000.00 but not
���� over $35,000.00 . . . . . ���������������� $280.00 plus 1.750% of
the excess over $20,000.00
Over $35,000.00 but not
���� over $40,000.00 . . . . . ���������������� $542.50 plus 3.500% of
the excess over $35,000.00
Over $40,000.00 but not
���� over $75,000.00 . . . . . ���������������� $717.50 plus 5.525% of
the excess over $40,000.00
Over $75,000.00 . . . . . ������������������� $2,651.25 plus 6.370% of
the excess over $75,000.00
���� (5)�� for taxable years
beginning on or after January 1, 2004 but before January 1, 2018:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . . ������������� 1.400%
of taxable income
Over $20,000.00 but not
���� over $35,000.00 . . . . . ���������������� $280.00 plus 1.750% of
the excess over $20,000.00
Over $35,000.00 but not
���� over $40,000.00 . . . . . ���������������� $542.50 plus 3.500% of
the excess over $35,000.00
Over $40,000.00 but not
���� over $75,000.00 . . . . . ���������������� $717.50 plus 5.525% of
the excess over $40,000.00
Over $75,000.00 but not
���� over $500,000.00 . . . . . ������������� $2,651.25 plus 6.370% of
the excess over $75,000.00
Over $500,000.00 . . . . . ����������������� $29,723.75 plus 8.970% of
the excess over $500,000.00
���� (6)�� for taxable years
beginning on or after January 1, 2018:
If the taxable income is: ������������������ The
tax is:
Not over $20,000.00 . . . . . ������������� 1.400%
of taxable income
Over $20,000.00 but not
���� over $35,000.00 . . . . . ���������������� $280.00 plus 1.750% of
the excess over $20,000.00
Over $35,000.00 but not
���� over $40,000.00 . . . . . ���������������� $542.50 plus 3.500% of
the excess over $35,000.00
Over $40,000.00 but not
���� over $75,000.00 . . . . . ���������������� $717.50 plus 5.525% of
the excess over $40,000.00
Over $75,000.00 but not
���� over $500,000.00 . . . . . ������������� $2,651.25 plus 6.370% of
the excess over $75,000.00
Over $500,000.00 but not
���� over $5,000,000.00 . . . . . ���������� $29,723.75 plus 8.970% of
the excess over $500,000.00
Over $5,000,000.00 . . . . . �������������� $433,373.75 plus 10.75% of
the excess over $5,000,000.00
���� c.���� For the purposes of
this section, an individual who would be eligible to file as a head of
household for federal income tax purposes but for the fact that such taxpayer
is a nonresident alien, shall determine tax pursuant to subsection a. of this
section.
���� d.��� For the purposes of this
section, for taxable year 2018, withholding by every employer from salaries,
wages and other remuneration paid by an employer for services rendered
described in subsections a. and b. of this section, in excess of $5,000,000
during that taxable year, shall be at the rate of 15.6% as soon as practicable
but no later than September 1, 2018. The Director of the Division of Taxation
is authorized to do all things necessary to implement the withholding tax
prescribed by this section for taxable year 2018.
���� e.���� No additions to tax or
penalty shall be imposed under N.J.S.54A:9-6 for insufficient payment of
estimated tax that may otherwise be due on salaries, wages and other
remuneration received before September 1, 2018, on which there is a rate of tax
imposed pursuant to subsections a. and b. of this section.
���� f.���� An employer maintaining
an office or transacting business within this State and making payment of any
salaries, wages and remuneration subject to New Jersey gross income tax or
making payment of any remuneration for employment subject to contribution under
the New Jersey "unemployment compensation law," pursuant to
R.S.43:21-1 et seq., that is subject to New Jersey gross income tax shall not
be subject to interest, penalties or other costs that may otherwise be imposed
for insufficient withholding of salaries, wages and other remuneration made
before September 1, 2018, that is directly attributable to the enactment of the
taxable income tables and tax rates in subsections a. and b. of this section.
(cf: P.L.2018, c.45, s.10)
���� 2.��� This act shall take
effect immediately and apply to taxable years beginning on or after January 1,
2020.
STATEMENT
���� The bill revises the gross
income tax rates
for joint filers and similar
taxpayers and is designated as the Marriage Penalty Elimination Act.�
���� As is common with progressive
income tax structures, a marriage penalty occurs when married taxpayers, who
would have otherwise faced a lower income tax liability by remaining single and
filing individual tax returns, face a higher tax liability due to their marital
status and filing their taxes jointly.� For the sake of tax equity, the bill
would amend the tax brackets for those filing jointly to align the tax brackets
with those imposed on taxpayers filing individual tax returns.� These changes
would lower the gross income tax liability of most joint filers.
���� The bill accomplishes
eliminating the so-called marriage penalty by making the following changes to
the tax brackets of joint filers:
�
Taxable income up to $40,000 would be taxed at a rate of 1.40 percent.�
�
Taxable income over $40,000 but not over $70,000 would be taxed at a rate
of 1.75 percent.
���� The bill would take effect
immediately and apply to taxable years beginning on or after January 1, 2020.