ASSEMBLY, No. 741

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblyman JONES

An Act concerning the exclusion of certain income from the gross income tax for persons aged 62 years or older, amending P.L.1977, c.273.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. Section 3 of P.L.1977, c.273 (C.54A:6-15) is amended to read as follows:

    3. a. Gross income shall not include income of up to $10,000.00 for a married couple filing jointly, $5,000.00 for a married person filing separately, or $7,500.00 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1, when received in any tax year by a person aged 62 years or older who received no income in excess of [$3,000.00] $6,000.00 from one or more of the sources enumerated in subsections a., b. and k. of N.J.S.54A:5-1, provided, however, that the total exclusion under this subsection and that allowable under N.J.S.54A:6-10 shall not exceed the amounts of the exclusions set forth in this subsection.

    b. In addition to the exclusion provided under N.J.S.54A:6-10 and subsection a. of this section, gross income shall not include income of up to $6,000.00 for a married couple filing jointly or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1, or $3,000.00 for a single person or a married person filing separately, who is not covered under N.J.S.54A:6-2 or N.J.S.54A:6-3, but who would be eligible in any year to receive payments under either section if he or she were covered thereby.

(cf: P.L.1990, c.61, s.17)

    2. This act shall take effect immediately and shall be applicable to

taxable years beginning on and after January 1 next following enactment.

STATEMENT

    This bill increases from $3,000 to $6,000 the amount a taxpayer may receive in the form of wages and salaries, net profits from business or partnership income, and remain eligible for the special "retirement" income exclusion for taxpayers who are aged 62 years and older. Such taxpayers may currently exclude from gross income pension and annuity amounts equal to $10,000 for a married couple filing jointly, $5,000 for a married person filing separately, or $7,500 for an individual filing as a single taxpayer; any remaining exclusion amount (in excess of pension and annuity) may be applied against other income, subject to the limit on income from wages, business or partnerships. This $3,000 limit has not been changed since it was enacted in 1977. The increase reflects the approximate impact of annual inflation through 1990. The change is intended to allow senior citizens to receive modest amounts of earned income without incurring income tax liability, or experiencing a reduction in homestead property tax rebate eligibility.

Increases allowable earned income under the gross income tax exclusion for retirement and other income for persons aged 62 and older.