New Jersey does not tax Social Security benefits

New Jersey has no state income tax on Social Security retirement, survivor, or disability benefits. This applies to all recipients who live in the state, regardless of income level or filing status. If you receive Social Security and live in New Jersey, you will not owe state tax on those payments.

The federal government may still tax your Social Security benefits depending on your total income, but that is separate from state tax. New Jersey's exemption covers only the state portion.

Key Takeaways

  • New Jersey residents pay no state income tax on any form of Social Security benefit — retirement, survivor benefits, or disability payments.
  • Federal tax on Social Security depends on your combined income (wages, interest, and half your Social Security), not on where you live.
  • If you file a federal return and owe federal tax on Social Security, you still owe nothing to New Jersey on that same income.
  • New Jersey also exempts military pensions and some other retirement income, but Social Security has its own separate exemption.

How federal tax on Social Security works

The federal government taxes Social Security based on your combined income, which includes wages, interest, dividends, and half of your Social Security benefit. If your combined income exceeds certain thresholds, up to 50 percent or 85 percent of your benefits become taxable at the federal level.

For 2024, the thresholds are $25,000 for single filers and $32,000 for married couples filing jointly. These thresholds have not changed since 1984 and do not adjust for inflation. If your combined income falls below these amounts, you owe no federal tax on Social Security.

You can estimate your federal tax liability using the IRS worksheet in Publication 915, or you can contact the Social Security Administration directly. They can tell you what portion of your benefit is taxable based on your specific income.

What counts as income for the federal calculation

Combined income includes your adjusted gross income (wages, self-employment income, pensions, interest, dividends, capital gains) plus half of your Social Security benefit. It does not include Supplemental Security Income (SSI), which is a separate needs-based program.

If you are married and file jointly, both spouses' income counts toward the household threshold, even if only one spouse receives Social Security. If you are married but file separately, the threshold drops to zero, meaning nearly all of your Social Security becomes taxable.

State tax treatment in neighboring states

New Jersey's approach differs from some nearby states. Pennsylvania also exempts all Social Security from state tax. New York taxes Social Security only if your federal adjusted gross income exceeds $20,000 (single) or $32,000 (married filing jointly), and even then only a portion may be taxable. Connecticut and Massachusetts both tax Social Security under their own income tax rules.

If you moved to New Jersey from another state or are considering moving, check the rules in your former or future state. Some states offer exemptions only to residents over a certain age, while others have no exemption at all.

Reporting Social Security on your New Jersey return

If you receive Social Security and live in New Jersey, you do not need to report it on your state return. New Jersey's tax forms do not include a line for Social Security income because it is fully exempt.

You will still receive a Social Security Benefit Statement (Form SSA-1099) each January showing what you received the previous year. Keep this for your records, but you do not need to attach it to a New Jersey return unless you are also filing a federal return and owe federal tax on your benefits.

Other New Jersey tax exemptions for retirees

New Jersey exempts several types of retirement income beyond Social Security. Military pensions are fully exempt. Pensions from the New Jersey Public Employees' Retirement System (PERS) and the Teachers' Pension and Annuity Fund (TPAF) are exempt for recipients over 62. Some federal pensions also receive partial exemptions.

Private pensions and 401(k) withdrawals are taxable in New Jersey unless they fall under a specific exemption. If you receive multiple forms of retirement income, check which ones are exempt and which are subject to state tax.

What to do if you owe federal tax on Social Security

If your combined income exceeds the federal threshold and you owe federal tax on your Social Security, you have two options: pay the tax when you file your federal return, or request that the Social Security Administration withhold taxes from your monthly benefit.

To set up withholding, contact Social Security at 1-800-772-1213 or visit your local Social Security office with Form W-4V (Voluntary Withholding Request). You can choose to withhold 7, 10, 15, or 25 percent of your benefit. This withholding applies only to federal tax; New Jersey will not receive any portion of it.

Frequently Asked Questions

Do I have to file a New Jersey tax return if I only receive Social Security?

No. If Social Security is your only income and you live in New Jersey, you have no state tax filing requirement. You may still want to file a federal return to claim the Earned Income Tax Credit or other federal credits, but that is separate from New Jersey.

What if I moved to New Jersey partway through the year?

New Jersey taxes income based on residency for the full tax year. If you moved to New Jersey after January 1, you may owe tax to your previous state for the months you lived there. Contact that state's tax department to determine your filing requirement. Social Security received during months you lived in New Jersey is not taxable to New Jersey.

Does my spouse's Social Security affect my New Jersey taxes?

No. Each person's Social Security is exempt from New Jersey tax individually. Your spouse's benefits do not create a tax liability for you in New Jersey, even if you file jointly.

If I owe federal tax on Social Security, do I also owe New Jersey tax?

No. Federal tax and New Jersey tax are separate. You can owe federal tax on Social Security and still owe zero to New Jersey. The federal threshold ($25,000 single, $32,000 married) is different from New Jersey's threshold (which is zero, because all Social Security is exempt).

What if I work part-time and receive Social Security at the same time?

Your wages are taxable to New Jersey. Your Social Security is not. For federal purposes, your wages plus half your Social Security count toward the combined income threshold. If you exceed it, part of your Social Security becomes federally taxable, but it remains exempt from New Jersey tax.