A flat-fee financial advisor serving Princeton, NJ.

New Jersey tax treatment

New Jersey taxes income at up to 10.75%, with 6.37% reached at $150,000 of joint taxable income and 8.97% at $500,000, and taxes capital gains at the same rates. Social Security is not taxed, and from 62 a household with total income of $100,000 or less can exclude up to $100,000 (joint) of pension and IRA income, shrinking to nothing above $150,000. The estate tax ended in 2018 but the inheritance tax remains for heirs outside the immediate family. For a Princeton household the exclusion's cliffs and the inheritance tax drive the plan.

Retirement income: Social Security untaxed; from 62, up to $100,000 joint / $75,000 single of pension and IRA income excluded when total income is $100,000 or less, partial to $150,000, none above

Social Security and Railroad Retirement benefits are not taxed. Taxpayers 62 or older (or disabled) with total income of $100,000 or less may exclude up to $100,000 of pension, annuity and IRA income on a joint return, $75,000 single or head of household, $50,000 married filing separately; with total income from $100,001 to $125,000 the exclusion is 50%, 37.5% or 25% of that income, from $125,001 to $150,000 it is 25%, 18.75% or 12.5%, and above $150,000 there is none. Because New Jersey never allowed a deduction for IRA contributions, the contribution portion of a withdrawal is not taxed again, and a Roth conversion is taxable only on amounts not previously taxed by New Jersey; qualified Roth distributions are excluded entirely.

Estates: Estate tax repealed for deaths from 2018; inheritance tax remains at 0% for close family, 11%–16% for siblings, 15%–16% for others

New Jersey imposes no estate tax on deaths on or after January 1, 2018, but its inheritance tax still applies by class of beneficiary. Class A (spouse, civil-union or domestic partner, children, grandchildren, parents, grandparents) pays nothing and charities are exempt. Class C (siblings and a child's spouse) pays nothing on the first $25,000, then 11% on the next $1,075,000, 13% and 14% on the next $300,000 each and 16% above $1,700,000. Class D (everyone else, including nieces, nephews and unmarried partners who are not registered domestic partners) pays 15% on the first $700,000 and 16% above. Property transferred in the three years before death for less than its full value is taxed as part of the estate.

How local households are paid

Princeton is paid by Princeton University, by the pharmaceutical corridor along Route 1 (Bristol Myers Squibb's Lawrenceville and Princeton campuses and Novo Nordisk's U.S. headquarters in Plainsboro among them), by the Educational Testing Service, and by finance and law professionals commuting to New York and Philadelphia. Pharmaceutical restricted stock, university retirement plans and partnership income are the recurring account types, and the household is often a high-income one approaching a retirement in which New Jersey's exclusion suddenly matters.

Rates change; check before you act

Brackets, thresholds, and retirement-income rules are revised regularly. The figures above are for tax year 2026. Treat them as a starting point and confirm the current year before making a decision on them.

Restricted stock at a pharmaceutical or financial employer: vesting, concentration and the New Jersey bracket each sale lands in.

A retirement-income design that holds total income under the $100,000 or $150,000 exclusion thresholds where it can, and moves conversions into the years it cannot.

The inheritance tax on any bequests to siblings, nieces and nephews or an unmarried partner, and whether a lifetime giving programme should begin now.