New Jersey State Income Tax Withholding
Last Updated: January 2026
Overview
New Jersey imposes a progressive state income tax with seven brackets, including a top rate of 10.75% for high-income earners. The state requires its own withholding form and has a reciprocal agreement with Pennsylvania.
2026 Tax Rates
| Taxable Income (Single) | Rate |
|---|---|
| $0 - $20,000 | 1.40% |
| $20,001 - $35,000 | 1.75% |
| $35,001 - $40,000 | 3.50% |
| $40,001 - $75,000 | 5.525% |
| $75,001 - $500,000 | 6.37% |
| $500,001 - $1,000,000 | 8.97% |
| Over $1,000,000 | 10.75% |
Note: Married Filing Jointly and Head of Household have different bracket thresholds.
Deductions and Exemptions
Personal Exemptions:
- Taxpayer: $1,000
- Spouse: $1,000
- Each Dependent: $1,500
New Jersey does not use a standard deduction. Instead, taxpayers claim specific deductions on their annual return.
Special Considerations
Required State Form
New Jersey requires Form NJ-W4 (Employee's Withholding Allowance Certificate). The federal Form W-4 is not accepted for New Jersey withholding purposes.
Form NJ-W4 requires employees to indicate:
- Filing status
- Rate table (A through E) based on filing status and income
- Number of allowances
- Additional withholding amounts
Withholding Rate Tables
New Jersey uses five different rate tables (A through E) based on:
- Filing status
- Estimated annual income level
- Number of income sources
Employees must select the appropriate table on Form NJ-W4. Using the wrong table may result in significant under- or over-withholding.
Reciprocal Agreement
New Jersey has a reciprocal agreement with Pennsylvania only.
Pennsylvania residents working in New Jersey:
- Are exempt from New Jersey withholding
- Must complete Form NJ-165 (Employee's Certificate of Non-Residence in New Jersey)
- Are subject to Pennsylvania withholding instead
New Jersey residents working in Pennsylvania:
- Are exempt from Pennsylvania withholding
- Are subject to New Jersey withholding
No Local Income Taxes
New Jersey does not permit local income taxes. Only state withholding is required.
Electronic Filing
All employers must file and pay electronically, regardless of size.