The new year will bring some tax changes in New Jersey.
A 2016 law that raised the state’s tax on gas also provides for tax breaks taking effect Jan. 1.
Residents 62 and older will now be able to exclude up to $45,000 in pensions and other retirement income from the state income tax. That rate goes up to $60,000 for those who file joint returns.
“I actually do think It’ll keep more people here in the state. Our retirees do want to stay around by their families,” said state Sen. Steve Oroho, R-Sussex.
What’s more, the estate tax will be eliminated completely.
And that could encourage wealthy residents to stay in New Jersey, said Gov. Chris Christie.
“If you also had a $675,000 estate tax here, adding to what’s happened at the federal level, and if we don’t get any relief at the state level, people are incentivized to go,” he said. “And the older they get, the more incentivized they are to go.”
Ralph Thomas, the CEO of the New Jersey Society of CPAs, said he hopes Gov.-elect Phil Murphy will retain the tax breaks.
“If the new administration comes in and puts forth proposals to change those things, I think you’ll find people saying, ‘I need to find a place where there’s a lot more certainty, so I can plan for the future that’s ahead of me,’ ” he said.
The state sales tax will go down a quarter-of-a-percent to 6.625 percent on New Year’s Day. Most residents probably won’t notice that unless they buy a car or make another major purchase, Thomas said.