Murphy signs law exempting combat pay from N.J. income tax

New Jersey Democratic Gov. Phil Murphy on Monday signed bipartisan legislation exempting combat pay earned by members of the military from the state income tax.

Federal law already exempts combat pay from income tax, but the New Jersey law means pay that residents earn while in combat zones won’t be subject to the state’s income tax as well.

NEW: Combat pay earned by active-duty military servicemembers is now exempt from state income taxes.

Even in the midst of our most serious fiscal crisis, we were able to find a way to make life easier for our troops by providing some long-overdue relief.https://t.co/V77kusZUR4 pic.twitter.com/k73zM0qLqs

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— Governor Phil Murphy (@GovMurphy) September 28, 2020

Murphy signed the bill Monday during a Facebook Live session with Republican Sen. Michael Testa and Democratic Assemblywoman Annette Quijano. Both lawmakers sponsored the legislation, which passed unanimously in both chambers earlier this month.

The measure defines a combat zone as any area the president designates as such in an executive order. Combat zone pay is an additional payment beyond a military member’s regular salary.

Lawmakers say there are currently four active combat zones: the Sinai Peninsula; the Afghanistan area, which includes 10 countries; the Kosovo area, which includes parts of the Balkans; and the Arabian Peninsula area.