Overview of New Jersey Taxes
New Jersey has a progressive income tax with rates that are among the highest in the nation. Property and sales taxes are also above average.
Your 2025 Estimated State Income Tax:
Breakdown of Your Income Taxes
Your Annual Take-Home Pay
About This Calculator
Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions.
How Income Taxes Are Calculated
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First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
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Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer.
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Based on your filing status, your taxable income is then applied to the tax brackets to calculate your federal income taxes owed for the year.
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Your location will determine whether you owe local and / or state taxes.
When Do We Update? - We check for any updates to the latest tax rates and regulations annually.
Customer Service - If you would like to leave any feedback, feel free to email info@smartasset.com.
Assumptions
Deductions
- "Other Pre-Tax Deductions" are not used to calculate state taxable income.
Credits
- The only federal credit automatically calculated is the Savers Credit, depending on your eligibility.
- We do not apply any refundable credits, like the Child Tax Credit or Earned Income Tax Credit (EITC).
- We do not apply state credits in our calculations.
Itemized Deductions
- If itemizing at the federal level, you may need to itemize at the state level too. Some states don't allow itemized deductions, which is accounted for in our calculations.
- When calculating the SALT deduction for itemized deductions, we use state and local taxes, and we assume your MAGI.
- We assume that there is no cap to itemized deductions, if a state allows them.
- We do not categorize itemized deductions (such as medical expenses or mortgage interest), which could be subject to specific caps per state.
Local Tax
- Depending on the state, we calculate local taxes at the city level or county level. We do not include local taxes on school districts, metro areas or combine county and city taxes.
- With the exception of NYC, Yonkers, and Portland/Multnomah County, we assume local taxes are a flat tax on either state taxable income or gross income.
Actual results may vary based on individual circumstances and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee income tax amounts or rates. Past performance is not indicative of future results.
SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.
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Taxes in New Jersey
New Jersey State Tax Quick Facts
- Income tax: 1.40% – 10.75%
- Sales tax: 6.625% – 8.625%
- Property tax: 1.89% median effective rate
- Gas tax: 44.95 cents per gallon of regular gasoline
The Garden State has a lot of things going for it, but low taxes are not among its virtues. The median homeowner in New Jersey pays $9,358 in property taxes annually, which equals an effective property tax rate of 1.89%, the second-highest in the nation after Illinois. The state’s income tax ranges from 1.40% up to 10.75%, one of the highest top rates in the country.
Of course, if you don’t own a home or if your income places you in one of New Jersey’s lower tax brackets, the picture may not be so bleak. New Jersey’s sales tax rate is relatively close to the national average.
A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
New Jersey Income Taxes
New Jersey’s income tax is structured similarly to the federal income tax. Rates are based on income tax brackets, with income within each bracket being taxed at the corresponding rate. The table below shows brackets and rates for filers in New Jersey.
Income Tax Brackets
| Rate | Single Filers | Married, Filing Jointly | Married, Filing Separately | Head of Household |
|---|---|---|---|---|
| 1.400% | $0 – $20,000 | $0 – $20,000 | $0 – $20,000 | $0 – $20,000 |
| 1.750% | $20,000 – $35,000 | $20,000 – $50,000 | $20,000 – $35,000 | $20,000 – $50,000 |
| 2.450% | N/A | $50,000 – $70,000 | N/A | $50,000 – $70,000 |
| 3.500% | $35,000 – $40,000 | $70,000 – $80,000 | $35,000 – $40,000 | $70,000 – $80,000 |
| 5.525% | $40,000 – $75,000 | $80,000 – $150,000 | $40,000 – $75,000 | $80,000 – $150,000 |
| 6.370% | $75,000 – $500,000 | $150,000 – $500,000 | $75,000 – $500,000 | $150,000 – $500,000 |
| 8.970% | $500,000 – $1,000,000 | $500,000 – $1,000,000 | $500,000 – $1,000,000 | $500,000 – $1,000,000 |
| 10.750% | $1,000,000+ | $1,000,000+ | $1,000,000+ | $1,000,000+ |
All of the rates above apply to New Jersey taxable income, which is total income (including capital gains) minus certain deductions, as well as the New Jersey personal exemption of $1,000 ($2,000 for joint filers). Some forms of income that are not taxable include unemployment compensation, Social Security benefits, workers’ compensation and lottery winnings of $10,000 or less. Expenses that may be deducted in New Jersey include certain unreimbursed medical expenses, New Jersey property taxes, Archer MSA contributions and, if you’re self-employed, health insurance payments.
New Jersey Sales Tax
New Jersey has a single, statewide sales tax rate of 6.625%. The flat sales tax rate means you will pay the same rate wherever you are in the state, with the exception of New Jersey’s “Urban Enterprise Zones.” Purchases made at qualified businesses (typically retailers) in UEZs face a reduced sales tax rate of 3.3125%.
Outside of those exceptions, the statewide sales tax rate applies to most products and services, including electronics, furniture, fitness club memberships, parking, landscaping services and digital property (e.g. electronically downloaded music, videos, software, etc.). Some items, however, are exempt. Groceries, prescription and over-the-counter drugs and most types of clothing and footwear are all exempt.
Sales Tax Rates (Updated January 2026)
| County Name | Maximum Tax Rate |
|---|---|
| Atlantic County | 6.625% |
| Bergen County | 6.625% |
| Burlington County | 6.625% |
| Camden County | 6.625% |
| Cape May County | 6.625% |
| Cumberland County | 8.625% |
| Essex County | 6.625% |
| Gloucester County | 6.625% |
| Hudson County | 6.625% |
| Hunterdon County | 6.625% |
| Mercer County | 6.625% |
| Middlesex County | 6.625% |
| Monmouth County | 6.625% |
| Morris County | 6.625% |
| Ocean County | 6.625% |
| Passaic County | 6.625% |
| Salem County | 6.625% |
| Somerset County | 6.625% |
| Sussex County | 6.625% |
| Union County | 6.625% |
| Warren County | 6.625% |
New Jersey Property Tax
New Jersey has the highest property taxes in the country. The effective property tax rate (property taxes as a percentage of the median home value) is 1.89%. The median real estate taxes paid on a home in the state is $9,358 annually.
For a comparison, in Monmouth County (south of New York City) the average annual property tax bill is nearly $10,000. As mentioned above, property taxes are usually tax deductible on your New Jersey income tax return. Starting with tax year 2018, you can now deduct up to $15,000 of property taxes. Prior to 2018, the maximum property tax deduction was $10,000.
If you are looking to purchase a property in the Garden State or refinance one, take a look at our New Jersey mortgage guide for details about getting a mortgage in the state. You can also calculate your property taxes with our New Jersey property tax calculator.
New Jersey Inheritance and Estate Tax
New Jersey has an inheritance tax. The inheritance tax rate ranges from 11% to 16% and applies only to beneficiaries who are not one of the following in relation to the decedent: mother, father, grandparent, spouse, civil union partner, child, grandchild, great-grandchild, stepchild or domestic partner. Meanwhile, siblings, close friends or step-parents would all be required to pay the inheritance tax, although the first $25,000 of the inheritance is exempt. Anyone outside of these categories will not receive an exemption.
New Jersey has completely phased out its estate tax.
New Jersey Capital Gains Tax
Capital gains are taxable in the state of New Jersey. They are treated as regular income and, in combination with other income, they are taxed at the rates in the tables above.
New Jersey Cigarette Tax
New Jersey collects taxes of $2.70 per pack of 20 cigarettes.