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S4478
SENATE, No. 4478
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED JUNE 22, 2026
Sponsored by:
Senator� MICHAEL L. TESTA, JR.
District 1 (Atlantic, Cape May and Cumberland)
SYNOPSIS
���� Modifies gross income tax withholding requirements
for certain State Lottery winnings received by persons without social security
or tax identification number.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
concerning the withholding of certain lottery
winnings and amending N.J.S.54A:7-1.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� N.J.S.54A:7-1 is amended
to read as follows:
���� 54A:7-1.� Requirement of
withholding tax from wages.
���� (a)�� General.
--
From
and after September 1, 1976, every employer maintaining an office or
transacting business within this State and making payment of any wages subject
to New Jersey personal 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 personal income tax to a resident or nonresident individual shall deduct
and withhold from such wages for each payroll period a tax computed in such
manner as to result, so far as practicable, in withholding from the employee's
wages during each calendar year an amount substantially equivalent to the tax
reasonably estimated to be due resulting from the inclusion in the employee's New
Jersey income of his wages received during such calendar year.� The method of
determining the amount to be withheld shall be prescribed by regulations of the
director, with due regard to the withholding exemptions of the employee.
���� (b)�� Withholding exemptions.
--
For
purposes of this section:
���� An employee shall be entitled
to the equivalent of the same number of New Jersey withholding exemptions as
the number of withholding exemptions to which he is entitled for Federal income
tax withholding purposes.� An employer may rely upon the number of Federal
withholding exemptions claimed by the employee.
���� (c)�� The payor of New Jersey
gambling winnings shall withhold New Jersey gross income tax on those winnings
at a rate of
[
3%
]
three
percent
in all instances where the payor is required to withhold for
federal income tax purposes under subsection (q) of section 3402 of the federal
Internal Revenue Code of 1986 (26 U.S.C. s.3402), as amended, except that this
subsection shall not apply to the New Jersey State Lottery, except if winnings
paid by the New Jersey State Lottery are included in gross income pursuant to
N.J.S.54A:6-11.� The rate of withholding for gambling winnings paid by the New
Jersey State Lottery shall be determined by the director
, except that
notwithstanding the exclusion from gross income provided in N.J.S.54A:6-11, the
rate of withholding for gambling winnings for a prize in an amount exceeding
$600 paid by the New Jersey State Lottery shall be eight percent if the person
receiving payment of the winnings fails to provide proof of a federal social
security number or federal taxpayer identification number.
(cf: P.L.2009, c.69, s.4)
���� 2.��� This act shall take
effect immediately and apply to prize claims submitted on or after the date of
enactment.
STATEMENT
���� This bill modifies the gross
income tax withholding requirements for the payment of certain State Lottery
winnings to persons who do not possess a federal social security or tax
identification number.
���� Under current law, the
Division of State Lottery is required to withhold a percentage of New Jersey
Lottery winnings when the prize amount exceeds $10,000.� For prizes that are
greater than $10,000 but not $500,000, the division currently withholds five
percent of the winnings for gross income tax purposes. �However, if the person
receiving the winnings does not include proof of a federal social security
number or tax identification number, the division withholds eight percent of the
winnings for gross income tax purposes.
���� Under the bill, the division
is required to withhold eight percent of the winnings of prize amounts exceeding
$600 paid to any person who fails to provide proof of a federal social security
number or taxpayer identification number.