Permits teacher who retired from TPAF to return to employment for two years without reenrollment in TPAF; provides gross income tax relief for certain rehired teachers.

A137

ASSEMBLY, No. 137

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman AL BARLAS

District 40 (Bergen, Essex and Passaic)

Assemblywoman VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

SYNOPSIS

���� Permits teacher who retired from TPAF to return to
employment for two years without reenrollment in TPAF; provides gross income
tax relief for certain rehired teachers.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

concerning return to employment by a teacher
after retirement from the Teachers� Pension and Annuity Fund and supplementing
Title 18A and Title 54A of the New Jersey Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� a.� Notwithstanding the
provisions of any law or regulation to the contrary, a board of education may,
subject to the approval of the executive county superintendent of schools, hire
a retired teacher who is a former member of the Teachers� Pension and Annuity
Fund on a contractual basis for a term of not more than two full school years
provided that the salary paid to the retired teacher meets the criteria
enumerated in subsection d. of this section. The retired teacher shall not be
subject to the cancellation, reenrollment, and additional retirement allowance
provisions of N.J.S.18A:66-53.2, except that the cancellation, reenrollment,
and additional retirement allowance provisions shall apply if the former member
becomes employed within 180 days with the employer from which the member
retired. Employment or reemployment exceeding two full school years shall be
subject to the provisions of N.J.S.18A:66-53.2.

���� The former member�s retirement
shall have been a bona fide retirement and any employment or reemployment under
this section shall not be prearranged before retirement.

���� b.� A retired teacher employed
or reemployed pursuant to subsection a. of this section shall not obtain tenure
in the position and any tenure or seniority rights previously obtained by the
teacher shall not apply to the period of employment or reemployment.

���� c.�
The
approval of the executive county superintendent of schools pursuant to
subsection a. of this section shall be granted only upon demonstration by the
board of education that the board conducted a thorough search for candidates
and that the retired teacher is the only qualified and available person for the
position.

���� d.�
A retired teacher employed or reemployed pursuant to subsection a. of this
section may be hired on a contractual basis at a salary not less than 40
percent and not to exceed 70 percent of the median salary of a teacher employed
by the board of education.

���� 2.� a.� A taxpayer who is a retired
teacher, and who has been hired on a contractual basis pursuant to section 1 of
P.L. ,
c. (C. )
(pending before the Legislature as this bill), shall be allowed to deduct from
the taxpayer's gross income an amount equal to 50 percent of the salary or
other remuneration paid to the taxpayer during the taxable year for services
rendered pursuant to section 1 of P.L. ,
c. (C. )
(pending before the Legislature as this bill).

���� b.� For a taxpayer who claims
a deduction pursuant to subsection a. of this section, and who also receives
income from other sources, the taxpayer shall first claim any other exemption
or deduction allowed in the taxable year against the gross income attributable
to the taxpayer�s other sources of income before claiming any remaining
allowable exemption or deduction against the portion of gross income received
as salary and other remuneration for services rendered pursuant to section 1 of
P.L. , c. (C. )
(pending before the Legislature as this bill).

���� 3.� Notwithstanding the rates
of tax imposed pursuant to N.J.S.54A:2-1, the rate of tax imposed on the
portion of gross income received as salary or other remuneration for services
rendered pursuant to section 1 of P.L. , c. (C. )
(pending before the Legislature as this bill), and which is not deducted
pursuant to section 2 of P.L. ,
c. (C. )
(pending before the Legislature as this bill), shall be the rate of 1.4 percent
regardless of the taxpayer�s filing status, provided that such amount of gross
income exceeds the minimum taxable income for the taxpayer established in
N.J.S.54A:2-4.

���� 4.��� This act shall take
effect immediately.

STATEMENT

���� This bill permits a teacher
who retired from the Teachers� Pension and Annuity Fund (TPAF) to return to
employment for two years without reenrollment in the TPAF and provides gross
income tax relief for certain rehired teachers.

���� The bill permits a board of
education to, with the approval of the executive county superintendent of
schools, hire a retired teacher who is a former member of the TPAF on a
contractual basis for a term of not more than two full school years. The
approval of the executive county superintendent is to only be granted upon
demonstration by the board of education that the board conducted a thorough
search for candidates and that the retired teacher is the only qualified and
available person for the position. The bill stipulates that the retired teacher
may be hired at a salary not less than 40 percent and not to exceed 70 percent of
the median salary of a teacher employed by the board of education.

���� Under the bill, the
cancellation, reenrollment, and additional retirement allowance provisions of
current law do not apply to the retired teacher hired or rehired under the
bill, provided that if the retired teacher returns to work with the former
employer, it is required to occur more than 180 days after the retirement. The
bill also provides that the former member�s retirement is to be a bona fide
retirement and any employment or reemployment under the bill is prohibited from
being prearranged before retirement.

���� Additionally, the bill
stipulates that a retired teacher employed or reemployed under the bill is not
to obtain tenure in the position and any tenure or seniority rights previously
obtained by the teacher do not apply to the period of employment or reemployment.

���� The bill also provides gross
income tax relief for retired teachers who are rehired in accordance with the
provisions of the bill.� Specifically, the bill provides a gross income tax
deduction in the amount of 50 percent of the salary or other remuneration paid
to a retired teacher under the bill.� Of the remaining salary or remuneration
paid to a retired teacher under the bill, this income would be taxed separately
under the gross income tax at a rate of 1.4 percent, regardless of the
taxpayer�s filing status.