Retirement Taxes in New Jersey (2026)
New Jersey taxes income at an effective 6.37%, exempts Social Security entirely, and exempts the first $100,000 of pension income. On our standard retiree profile it ranks 44 of 50 for total state tax burden at $16,019 a year, with property tax at an effective 1.88% and combined sales tax at 6.60%.
Tax is one part of the picture. See the full free report on your move → or look up a county →
New Jersey at a glance
State income tax
6.37%
After a $0 standard deduction
Social Security
Fully exempt
State treatment only; federal rules still apply
401(k) / IRA withdrawals
First $100,000 exempt
Pension income
First $100,000 exempt
Effective property tax
1.88%
$9,375 on a $500,000 home
Combined sales tax
6.60%
State plus average local rate
Homeowners insurance
$1,417/yr
Average annual HO-3 premium
Cost index (goods & services)
105.1
US average = 100, BEA 2024. Housing excluded.
Estate / inheritance tax
Inheritance tax, top rate 16%
Cost index compares goods and services only — housing is excluded because it's captured separately in property tax. Source: BEA Regional Price Parities, 2024, US average = 100.
Rankings and dollar figures on this page use one documented profile: $126,000 of gross retirement income ($36,000 Social Security, $45,000 in 401(k)/IRA withdrawals, $18,000 pension, $12,000 dividends, $15,000 part-time earnings), a $650,000 home, and $32,000 of taxable annual spending. It is the same profile the calculator loads with, so you can reproduce every number here.
Where New Jersey ranks
New Jersey places 44 of 50 states by total state tax burden on the standard profile — $16,019 a year against a $10,910 50-state average, or 47% above the 50-state average.
- State income tax rate6.37%47% above the 50-state average
- Effective property tax rate1.88%107% above the 50-state average
- Combined sales tax rate6.60%in line with the 50-state average
- Homeowners insurance premium$1,417/yr5% below the 50-state average
- Cost of goods & services105.15% above the 50-state average
Comparisons are unweighted averages across the 50 states on our standard retiree profile, not population-weighted national figures.
How it compares to its peers
The states closest to New Jersey on total burden, using the same profile:
California
Rank 42 · $15,357/yr
$663 less than New Jersey
New York
Rank 43 · $15,772/yr
$248 less than New Jersey
New York retirement taxesKansas
Rank 45 · $16,051/yr
$31 more than New Jersey
What this means for a move
On the standard profile, 76% of the $16,019 annual burden in New Jersey is property tax — $12,188, against $2,112 of sales tax and $1,720 of income tax. Raising or lowering taxable withdrawals changes the 6.37% income tax line directly, so the total is sensitive to how much you draw each year.
Every $100,000 of home value costs $1,875 a year in New Jersey property tax, so a $500,000 house carries roughly $9,375. Average homeowners insurance runs $1,417 a year, 5% below the 50-state average. Goods and services price 5.1% above the US average (BEA 2024, housing excluded), which sits on top of the tax figure rather than inside it.
This page covers income, property and sales tax while you're living. For what happens at death — exemptions, rates, and which heirs pay — read the full estate and inheritance detail for New Jersey.
New Jersey retirement tax FAQ
Does New Jersey tax Social Security benefits?
No. New Jersey does not tax Social Security benefits at the state level. Federal taxation of benefits still applies based on your combined income.
How does New Jersey tax 401(k) withdrawals and pension income?
401(k) and IRA withdrawals: first $100,000 exempt. Pension income: first $100,000 exempt. Anything left over is taxed at an effective 6.37%.
What is the property tax rate in New Jersey?
New Jersey's effective property tax rate is 1.88% of home value — 107% above the 50-state average. On a $500,000 home that is about $9,375 a year.
Where does New Jersey rank for retirement taxes?
New Jersey ranks 44 of 50 states, lowest total burden first, on our standard retiree profile: $16,019 a year in combined state income, property and sales tax, versus a $10,910 unweighted average across the 50 states.
Compare New Jersey to your current state
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