Certain items of income are not subject to New Jersey income tax and should not be considered when determining whether you must file a New Jersey return. Below is a partial list of such items.
Federal Social Security benefits
Federal Railroad Retirement benefits (both Tier 1 and Tier 2)
United States military pensions and survivor's benefit payments
Permanent and total disability benefits, including VA benefits
Temporary disability benefits (including family leave insurance benefits) received from the State of New Jersey or as third-party sick pay
Gifts and inheritances
Homestead benefits, FAIR rebates, and NJ SAVER rebates
Property tax reimbursement (senior freeze) payments
Income tax refunds (New Jersey, Federal, and other jurisdictions)
New Jersey Lottery winnings from prizes in the amount of $10,000 or less
Child support payments
New Jersey earned income tax credit payments
Assistance from a charitable organization whether in the form of cash or property
Certain distributions from "New Jersey Qualified Investment Funds"
Also, interest from obligations of the State of New Jersey or any of its political subdivisions is not taxable, nor is interest from direct Federal obligations, such as US Savings Bonds and US Treasury Bills, Bonds, and Notes. However, if you are required to file a New Jersey tax return, you must report the total amount of nontaxable interest on the "Tax exempt interest" Line of your return
Life insurance proceeds received because of a person’s death
Employee’s death benefits
For more information on nontaxable income, refer to the section on Income in the New Jersey income tax return instruction booklet,Form NJ-1040.
More information concerning exempt obligations is available in Tax Topic Bulletin GIT-5, Exempt Obligations.
Order other tax forms.