New Jersey Tax Rates & Thresholds — 2026 Reference for Businesses & High Earners

What Changed From 2025 to 2026

The table compares selected 2025 and 2026 figures. The NJ income, BAIT, and sales-tax rates shown are unchanged; the Graduated Percent Fee changed during 2025. The federal SALT limits and Social Security wage base increased for 2026. Three New Jersey laws signed June 30, 2026 also change 2026 results without changing a tax rate.

For otherwise deductible Schedule A taxes, the SALT limit starts decreasing above modified adjusted gross income of $500,000 in 2025 and $505,000 in 2026 ($250,000 and $252,500, respectively, if married filing separately). Sources: IRS 2025 Schedule A instructions; IRS 2026 SALT correction; SSA contribution and benefit bases. New Jersey 2026 laws, checked October 5, 2026: P.L. 2026, c. 21, c. 22, and c. 26. All three were approved June 30, 2026, per the Governor's bill-action notice. See our OBBBA guide for context. NJ sources appear below.

New Jersey Income Tax (Gross Income Tax)

New Jersey taxes personal income on a graduated schedule. The brackets and the exact breakpoints depend on your filing status. The two figures that matter most for planning are the floor and the ceiling.

The 10.75% top rate has applied since January 1, 2020, when New Jersey lowered the threshold for its top bracket to $1 million. Here is the complete schedule, unchanged since that change and in effect for tax year 2026.

2026 NJ Tax Brackets — Single or Married Filing Separately

2026 NJ Tax Brackets — Married Filing Jointly, Head of Household, or Qualifying Surviving Spouse

Each rate applies to the taxable-income portion within its band. The separate and joint schedules also apply to the corresponding NJ civil-union filing statuses. Sources: 2026 NJ-1040-ES instructions, page 3 and NJ tax rate schedules.

New Jersey generally taxes taxable capital gains at its graduated Gross Income Tax rates. There is no separate lower rate for long-term gains. Applicable exclusions and your New Jersey taxable income determine the amount taxed. The 10.75% rate applies only to taxable income above $1 million.

New Jersey income tax can be paid through withholding and estimated payments. Estimates are generally required when expected tax due exceeds $400 after withholding and credits. A taxpayer may instead increase withholding where available. Final liability depends on New Jersey taxable income, credits, and payments already made.

How Much Is NJ Income Tax? 2026 Examples

The 2026 NJ-1040-ES schedules (checked October 6, 2026) offer a shortcut. Multiply taxable income by its bracket rate, then subtract a fixed amount. A single filer with $100,000 of taxable income owes $6,370 (6.37%) minus $2,126.25, or $4,243.75 — about 4.24% of that income.

Illustration only; results vary with credits, exclusions, and residency. The 2025 NJ-1040 instructions (checked October 6, 2026) send taxable income under $100,000 to the Tax Table. At $100,000 or more, you use the Tax Rate Schedules.

Source: NJ Division of Taxation — NJ Income Tax Rates and 2020 rate change; NJ capital-gains guidance; 2026 estimated-payment instructions.

New Jersey Business Taxes

Corporation Business Tax (CBT)

Corporations subject to CBT use the applicable return instructions to calculate their tax base and select a rate. The standard rate bands below are whole-base rates, not marginal slices. Combined-group and short-period rules can affect rate eligibility.

Corporate Transit Fee. A subject taxpayer whose New Jersey taxable net income exceeds $10 million pays 2.5% of that entire amount, in addition to regular CBT. The fee applies to privilege periods beginning January 1, 2024, through December 31, 2028. Separate-return NJ S corporations and qualifying public utilities are exempt. A combined group is tested as one taxpayer, including income attributable to its S-corporation and utility members.

Corporations subject to CBT generally owe a minimum tax even in a loss year; the amount depends on the filing category, receipts, and applicable group rules. Common ownership and a unitary business can trigger combined reporting when a member is subject to NJ CBT, subject to the return instructions. NJ S corporations generally owe minimum CBT, but certain federally taxed corporate income, including built-in gains or net passive income, can produce a higher income-based liability.

Minimum tax. It depends on NJ gross receipts. The 2025 CBT-100 and CBT-100S instructions and the Division's CBT overview (checked October 6, 2026) list these amounts.

Members of an affiliated or controlled group with $5,000,000 or more in total payroll owe $2,000, whatever their receipts. For C corporations, that rule applies to separate-return filers. The 2025 CBT-100S instructions print the $562.50 tier as $562.

Sources: NJ CBT-100 instructions, CBT-100U combined-return instructions, CBT-100S instructions, and Corporate Transit Fee guidance. Use the instructions for your return and accounting period; the current linked CBT forms are labeled 2025.

Pass-Through Business Alternative Income Tax (BAIT)

BAIT is an optional entity-level tax for eligible partnerships, NJ S corporations, and LLCs classified as partnerships or S corporations for federal tax purposes. At least one qualifying individual, estate, or trust member must be subject to NJ Gross Income Tax on its distributive share. The rates apply to the following portions of distributive proceeds.

Qualifying BAIT payments can produce a federal entity-level deduction. NJ credit treatment depends on the member type; the credit is refundable for individual, estate, and trust members, while corporate-member rules differ. The federal benefit depends on the owners’ circumstances. An election is required each year by the original PTE-100 due date and before estimated BAIT payments are made.

You can model the federal benefit with our NJ BAIT savings calculator. For the mechanics and the trade-offs, see our NJ SALT workaround guide.

Partnerships with more than two owners and NJ-source income or loss generally owe an NJ partnership filing fee. The 2025 NJ-1065 instructions (checked October 6, 2026) set it at $150 per owner, up to $250,000.

Source: NJ Division of Taxation — PTE/BAIT rate schedule, BAIT eligibility, credits, and election FAQ, and IRS Notice 2020-75.

New Jersey Sales & Use Tax

New Jersey’s general Sales and Use Tax rate is 6.625%. It applies to most tangible personal property, specified digital products, and certain services unless an exemption applies. Most clothing, footwear, and grocery food are exempt, but items such as clothing accessories, sport-specific equipment, candy, and soft drinks have different rules.

Certified Urban Enterprise Zone sellers may charge 3.3125% on qualifying sales of tangible personal property in a zone. Location alone does not establish eligibility. Check the state’s item-specific guidance before collecting or paying tax.

Use Tax can apply when taxable goods or services are purchased for use in New Jersey and the seller does not collect the required tax. Tax paid to another jurisdiction may reduce the amount due. Individuals can report Use Tax on Form NJ-1040 or Form ST-18. Business reporting depends on registration and circumstances; qualifying businesses may use Form ST-18B.

Filing dates for the quarterly ST-50 return live on our NJ tax calendar. Online sellers should also review multi-state sales tax and Wayfair nexus.

Source: NJ Division of Taxation — Sales and Use Tax, Sales Tax Guide, UEZ rules, and Use Tax FAQ.

Real Estate Transfer & "Mansion Tax" (2025 Change)

The Graduated Percent Fee (GPF), often called the mansion tax, is additional to New Jersey’s ordinary Realty Transfer Fee. For covered, nonexempt deeds submitted for recording on or after July 10, 2025, the seller is legally responsible for the GPF. Contract arrangements can allocate payment without changing that statutory liability. Select the rate using the total consideration, then apply that rate to the entire consideration.

Covered classifications include Class 2 residential property, qualifying Class 3A farm property with a residential structure, Class 4A commercial property, and Class 4C cooperative units. Exemptions and combined-transfer rules can change the result. Ordinary Realty Transfer Fee may still apply when no GPF is due.

Transition refunds: For consideration over $2 million, a seller may claim the GPF paid above 1% if all parties fully executed the contract before July 10, 2025 and the deed was recorded by November 15, 2025. File Form RTF-3 with supporting records within one year after recording. This special deadline differs from the ordinary 90-day GPF refund deadline.

A nonresident individual, estate, or trust selling NJ real property generally owes an estimated Gross Income Tax payment unless an exemption or waiver applies. It is an income-tax prepayment, separate from transfer fees. A qualifying current-year excess-payment refund may be requested on Form A-3128 after recording; the annual NJ-1040NR is still required. Our NJ exit tax and mansion tax guide explains the calculation and exceptions.

Sources: NJ RTF and GPF guidance; July 2 transition notice; July 9 submission-date clarification; GPF exemptions; TB-57(R), June 2026.

New Jersey Inheritance & Estate Tax

New Jersey imposes no estate tax for deaths on or after January 1, 2018. Its separate Inheritance Tax can still apply. Liability depends on the beneficiary’s relationship to the decedent, the amount received, and applicable property and residency rules.

A qualifying domestic partner can be Class A; informal cohabitation alone does not establish that status. Step-grandchildren are not Class A solely because they descend from a stepchild. Use the state’s beneficiary definitions and return instructions to determine classification.

Source: NJ Division of Taxation — Inheritance Tax Rates, beneficiary classes, and IT-R instructions.

What These Rates Mean for Businesses & High Earners

BAIT and personal income tax use different bases and credit rules. Comparing the top rates alone does not establish savings. A useful comparison considers the entity’s distributive proceeds, each owner’s tax position, available credits, and the federal deduction.

A few situations turn these rates into real dollars. Owners weighing an S-corporation or BAIT election run several years at once. Sellers of a business or a high-value home model the transfer fee and the exit-tax prepayment before closing. Founders and investors note that starting with tax year 2026, New Jersey excludes qualified small business stock (QSBS) gains that are exempt federally under IRC Section 1202 (P.L. 2025, c.67). This exclusion applies to taxable years beginning on or after January 1, 2026, and only to the extent the gains are exempt federally. See the enacted NJ law. Our QSBS and New Jersey guide covers the rules, and our selling a business in NJ guide covers exit planning.

The tax effect of timing depends on the income, deductions, and rules in each year. Review a proposed sale or entity election before the transaction so that eligibility and filing requirements can be checked against your facts.

The rates on this page are the inputs. The right move depends on your full facts. Owners in these situations usually work through the numbers with a CPA before acting. If that is you, start with our tax planning service or the NJ tax deadline calendar.