Examples of Exempt (Nontaxable) Income
Do not include the following income when determining if you must file a return. These items should not appear anywhere on your form except for tax-exempt interest.
•• Federal Social Security
•• Railroad Retirement (Tier 1 and Tier 2)
•• United States military pensions and survivor’s benefit payments
•• Life insurance proceeds received because of a person’s death
•• Employee’s death benefits
•• Permanent and total disability, including VA benefits
•• Temporary disability received from the State of New Jersey or as third-party sick pay
•• Workers’ Compensation
•• Gifts and inheritances
•• Qualifying scholarships or fellowship grants
•• New Jersey Lottery winnings from prizes in the amount of $10,000 or less
•• Unemployment Compensation received from the state (but not supplemental unemployment benefit payments)
•• Family Leave Insurance (FLI) benefits
•• Interest and capital gains from: (a) Obligations of the State of New Jersey or any of its political subdivisions; or (b) Direct federal obligations exempt under law, such as U.S. Savings Bonds and Treasury Bills, Notes, and Bonds
•• Distributions paid by mutual funds to the extent the distributions are attributable to interest earned on federal obligations
•• Certain distributions from New Jersey Qualified Investment Funds
•• Earnings on qualified distributions from (1) qualified state tuition program accounts, including the New Jersey Better Educational Savings Trust program (NJBEST) accounts, or (2) qualified state 529A Achieving a Better Life Experience program (ABLE) accounts
•• Employer and employee contributions to 401(k) Plans up to the federal limit (but not federal Thrift Savings Funds)
•• Some benefits received from certain employer-provided cafeteria plans (but not salary reduction or premium conversion plans). See Technical Bulletin TB-39.
•• Benefits received from certain employer-provided commuter transportation benefit plans (but not salary reduction plans). See Technical Bulletin TB-24(R).
•• Contributions to and distributions from Archer MSAs if they are excluded for federal income tax purposes
•• Direct payments and benefits received under homeless persons assistance programs
•• Homestead Benefits
•• Senior Freeze (Property Tax Reimbursement) program benefits
•• Income Tax refunds (New Jersey, federal, and other jurisdictions)
•• New Jersey Earned Income Tax Credit payments
•• Welfare
•• Child support
•• Amounts paid as reparations or restitution to Nazi Holocaust victims
•• Assistance from a charitable organization, whether in the form of cash or property
•• Cancellation of debt
•• Amounts received as damages for wrongful imprisonment
•• Qualified disaster relief payments excluded under IRC §139
•• Payments from the September 11th Victim Compensation Fund