Increases gross income tax deduction available to veterans from $6,000 to $9,000 and indexes deduction for inflation.

A5308

ASSEMBLY, No. 5308

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 23, 2026

Sponsored by:

Assemblyman� ALEX SAUICKIE

District 12 (Burlington, Middlesex, Monmouth and Ocean)

Co-Sponsored by:

Assemblywoman Fantasia

SYNOPSIS

���� Increases gross income tax deduction available to
veterans from $6,000 to $9,000 and indexes deduction for inflation.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
increasing the gross income tax deduction available to
veterans, and amending N.J.S.54A:3-1.

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

���� 1.��� N.J.S.54A:3-1 is amended
to read as follows:

���� 54A:3-1.
�
Personal
exemptions and deductions.� Each taxpayer shall be allowed personal exemptions
and deductions against his gross income as follows:

���� (a)�� Taxpayer.� Each taxpayer
shall be allowed a personal exemption of $1,000.00 which may be taken as a
deduction from his New Jersey gross income.

���� (b)�� Additional exemptions.�
In addition to the personal exemptions allowed in (a), the following additional
personal exemptions shall be allowed as a deduction from gross income:

���� 1.��� For the taxpayer's
spouse, or domestic partner as defined in section 3 of P.L.2003, c.246
(C.26:8A-3), who does not file separately - $1,000.00.

���� 2.��� For each dependent who
qualifies as a dependent of the taxpayer during the taxable year for federal
income tax purposes - $1,500.00.

���� 3.��� Taxpayer 65 years of age
or over at the close of the taxable year - $1,000.00.

���� 4.��� Taxpayer's spouse 65
years of age or over at the close of the taxable year - $1,000.00.

���� 5.��� Blind or disabled
taxpayer - $1,000.00.

���� 6.��� Blind or disabled spouse
- $1,000.00.

���� 7.��� Taxpayer who is a
veteran honorably discharged or released under honorable circumstances from
active duty in the Armed Forces of the United States, a reserve component
thereof, or the National Guard of New Jersey in a federal active duty status,
as those terms are used in N.J.S.38A:1-1 -
[
$6,000
]

$9,000;
provided, however, that in tax year 2027 and thereafter, the amount of the
exemption shall be adjusted annually in direct proportion to the percentage
increase in the Chained Consumer Price Index for all Urban Consumers (C-CPI-U)
for the 12-month period ending August 31 of the immediately preceding tax year,
as reported by the United States Department of Labor.�

���� (c)�� Special Rule.� The
personal exemptions allowed under this section shall be limited to that
percentage which the total number of months within a taxpayer's taxable year
under this act bears to 12.� For this purpose 15 days or more shall constitute
a month.

���� (d)�� (Deleted by amendment,
P.L.1993, c.178).

���� (e)�� Nonresidents.� For
taxable years to which a certification pursuant to section 3 of P.L.1993, c.320
(C.54A:2-1.2) applies, a nonresident taxpayer shall be allowed the same
deduction for personal exemptions as a resident taxpayer.� However, if (1) the
nonresident taxpayer's gross income which is subject to tax under this act is
exceeded by (2) the gross income which the nonresident taxpayer would be
required to report under this act if the taxpayer were a resident by more than
$100.00, the taxpayer's deduction for personal exemptions shall be limited by
the percentage which (1) is to (2).

(cf: P.L.2019, c.146, s.1)

���� 2.��� This act shall take
effect immediately and shall apply to taxable years beginning on or after
January 1, 2026.

STATEMENT

���� This bill increases the gross
income tax deduction available to veterans from $6,000 to $9,000 and indexes
the amount of the deduction for inflation.

���� Currently, veterans who are
honorably discharged or released under honorable circumstances from active duty
in the Armed Forces of the United States, a reserve component, or the National
Guard of New Jersey in a federal active duty status, are eligible to deduct
$6,000 from their income for purposes of calculating their State gross income
tax liability.� This bill increases the deduction to $9,000 and, beginning in
tax year 2026, subject to an annual inflationary adjustment.�

���� Specifically, the amount of
the exemption would be adjusted annually beginning on tax year 2027 based on
the percentage increase in the Chained Consumer Price Index for all Urban
Consumers (C-CPI-U) for the 12-month period ending August 31 of the previous
tax year.� The C-CPI-U is the index currently used by the federal government to
adjust federal income tax brackets for inflation.� If there is no increase in
that index, the amount of the exemption would remain unchanged for the
applicable tax year.