In light of a recent poll that found 25 percent of New Jersey residents are “very likely” to leave the state when they retire, one lawmaker wants to reform the way the state taxes pension benefits.
The goal is to keep middle-class retirees in New Jersey.
More details from the Burlington County Times:
New Jersey Senate President Stephen Sweeney says he’s interested in changing the way the state taxes pension income to help keep retirees from leaving New Jersey for less expensive states.
New Jersey does not tax Social Security or military pensions, but requires residents to include pension income when they file their income tax returns.
Residents age 62 or older can qualify for a pension tax exclusion of up to $20,000 of their income for couples or $15,000 for individual filers, provided their gross income doesn’t exceed $100,000.
Speaking to seniors during a telephone town hall meeting hosted by AARP-NJ, Sweeney said he was interested in reforming the pension tax to help entice residents to remain in New Jersey during their retirements.
“We’re looking at raising the threshold to keep people in New Jersey,” Sweeney, D-3rd of West Deptford, said Tuesday.
[…]
The issue of seniors fleeing New Jersey has prompted several lawmakers to propose repealing the state’s inheritance tax or raising the state’s threshold for paying an estate tax from $675,000 to the federal level of $5.34 million.
Sweeney didn’t dismiss those proposals during the town hall, but said he also wanted to pursue changing the pension tax because it would assist more middle-class retirees.
“It really hits the middle class hard,” he said.
New Jersey taxes pension benefits at a rate of 3.6 percent; that number has grown from 3.1 percent since 2000.
But it’s not the only reason retirees are thinking about leaving. The state’s housing costs for seniors are the highest in the country, and healthcare costs are the third-highest.
The state and it’s residents would be well served if the lawmakers brought the extremely high property tax down to more realistic levels …that would help every resident not just seniors ……
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Lived in NJ all my life and it was a life altering decision to leave in 2010 due to a job transfer. As it turned out my Jackson Twp property taxes were $6000 in 2010 when I left and now are $3000 for lake front property in Virginia in 2015. Not bad. Although I made out by moving from NJ I do miss my home and the great bagels, pizza and Italian food from NJ. Bitter sweet but I’m on a fixed income and glad I moved to preserve my pension for entertainment instead of taxes.
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The $100,000 limit is two low, most middle class families (two jobs, two pensions) are going to go over this limit and get no deduction. A more progressive deduction would allow me to stay but no deduction ,not even the $20,00 I’ve have to leave. Bottom line is goodbye NJ so sorry to have to go.but you made me do it.
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$100,000.00 is way to low especially by 2020. biggest mistake I ever made was moving to New Jersey..Here now for thirty years invested way to much in home & property which I would never recover because of these insane property taxes, along with the worst highways, and county roads. I can’t even ride my motorcycle without fear of potholes and speed bumps..Of the ten neighbors I originally had in our developement5 families moved out not because they wanted to. But because they could no longer afford it. they moved to Del., N.C., & Fla.
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As a widow collecting a pension I had to sell my property in order to make ends meet, I love NJ but it is getting near that time to leave. Taxes are out of control and retirees on pensions just can’t afford to live here anymore. Something needs to be done before NJ becomes a barren state. It’s pretty sad when the people you vote in to run your state runs it into the ground.
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