ASSEMBLY SENIOR ISSUES, TOURISM AND GAMING COMMITTEE

STATEMENT TO

ASSEMBLY, No. 1899

STATE OF NEW JERSEY

DATED: SEPTEMBER 16, 1996

      The Assembly Senior Issues, Tourism and Gaming Committee reports favorably Assembly, No.1899.

      This bill amends the New Jersey Gross Income Tax Act (specifically N.J.S.A.54A:6-10) to increase the amount of certain retirement income a person 62 years of age or older, or a disabled individual eligible for federal Social Security benefits, would be able to exclude from gross income. The excludable amounts will be increased from $10,000 to $20,000 for a married couple filing jointly, from $5,000 to $10,000 for a married person filing separately, and from $7,500 to $15,000 for an individual filing as a single taxpayer, in equal increments over a period of four years commencing with taxable years beginning on or after January 1, 1997. Currently, a person 62 years of age or older, or a disabled individual eligible for federal Social Security benefits, may exclude only up to $10,000 in retirement income if married and filing jointly, $5,000 if married but filing separately, or $7,500 if filing as a single taxpayer. Excludable retirement income includes such items as payments upon an annuity, endowment or life insurance contract, pension, disability or retirement benefit payments from a private or public plan, or Individual Retirement Account withdrawals.

      In addition, N.J.S.A.54A:6-15 is amended to increase the excludable amounts of other retirement income to match the levels in section 1 of the bill. Currently, N.J.S.A.54A:6-15 permits the exclusion from gross income of other retirement income, such as interest and dividend earnings from investments, but only if the taxpayer has less than $3,000 in income from such sources as a salary or wage, net profit from a business, or distribution of partnership income or net share of S corporation income. The above restriction is retained by the bill, as well as the restriction that limits the total amount of income excludable under both N.J.S.A.54A:6-10 and N.J.S.A.54A:6-15 to the amounts set forth in the latter.