Updated September 5, 2026. Quick answer: New Jersey does not tax military pensions at all, but most other pensions, annuities, and IRA withdrawals only become tax free through an income gated Retirement Income Exclusion that disappears completely once a taxpayer’s total income exceeds $150,000, so state, local, federal, and private pensions can all be fully taxable for higher income retirees.
Federal civil service pensions in New Jersey: does New Jersey tax federal pensions.
More New Jersey NJ-1040 lines, one by one: NJ-1040 line 26, NJ-1040 line 31 and NJ-1040 line 41.
More on public pension systems, topic by topic: NJ PFRS ordinary disability, NJ PFRS accidental disability and NJ PFRS divorce court orders.
State retirement-income forms, line by line: NJ-1040 pension exclusion.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: New Jersey tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does New Jersey tax 403(b) and 457(b) withdrawals.
Drawing a pension? Whether the state withholds tax from it, from its own documents: New Jersey tax withholding on pension payments.
Married, or planning for a spouse’s death? Whether the state is a community property state, from its own statutes: Is New Jersey a community property state?.
The state’s income tax schedule: the New Jersey 2026 tax brackets (pending).
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: New Jersey tax withholding on IRA and 401(k) withdrawals.
A pension earned in another state, or paid after a move, is covered here: does New Jersey tax out-of-state pensions.
Trusts have their own page: does New Jersey tax trust income.
Dividends and interest have their own page: does New Jersey tax dividends and interest.
Annuity payments have their own page: does New Jersey tax annuity income.
Planning for what you leave behind? The state’s estate tax answer, from its own tax documents: Does New Jersey have an estate tax?.
Military retired pay has its own page: does New Jersey tax military retirement.
Saving for a child’s college? The state’s 529 break has its own page: New Jersey 529 plan tax deduction.
Selling stocks, funds or real estate has its own page: does New Jersey tax capital gains.
Withdrawals from a 401(k) or IRA have their own page: does New Jersey tax 401(k) and IRA withdrawals.
The PFRS survivor pension and withdrawal rules, from the member guidebook: New Jersey PFRS retirement decisions.
More on New Jersey: New Jersey Probate Cost 2026 and New Jersey Probate Filing Fee.
Related state retirement tax guides: New Jersey to Georgia Retirement Taxes.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how New Jersey taxes retirement income generally.
The rule in the source’s own words. New Jersey Division of Taxation, Retirement Income Exclusions: “Your total income for the entire year was $150,000 or less.” (source, read October 5, 2026). This page’s governing citation: N.J. Div. of Taxation, Retirement Income Exclusions (njit7.shtml); njit6.shtml; GIT-1&2.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | State and local government pensions, including teachers’ pensions, are taxable income in New Jersey. Retirees who are 62 or older, or disabled under Social Security’s definition, can use the Retirement Income Exclusion described below to shelter some or all of that income if their total income is $150,000 or less. |
|---|---|
| Private (employer) pensions | Private sector employee pensions, annuities, and Keogh plan distributions are taxable income in New Jersey and are eligible for the same age gated, income gated Retirement Income Exclusion described below. |
| Federal government pensions (FERS/CSRS) | The New Jersey Division of Taxation lists federal civilian government pensions as taxable income, grouped together with state, local, and private pensions, and these are eligible for the same Retirement Income Exclusion if the taxpayer qualifies by age and income. |
| Military retirement pay | Military pensions from the Army, Navy, Air Force, Marines, or Coast Guard are not taxable in New Jersey and do not depend on the age or income limited exclusion that applies to other pensions. |
| IRA and 401(k)/403(b) distributions | Taxable IRA and 401(k) withdrawals are taxable income in New Jersey and are eligible for the same Retirement Income Exclusion as pensions and annuities if the taxpayer qualifies by age and income. |
| General retirement-income exclusion | New Jersey’s Retirement Income Exclusion is available to residents who were 62 or older, or disabled under Social Security’s definition, on the last day of the tax year, with total income of $150,000 or less. If total income is $100,000 or less, the maximum exclusion is $100,000 for married or civil union couples filing jointly, $75,000 for single filers, heads of household, or qualifying widow(er)s, and $50,000 for married or civil union partners filing separately. For total income between $100,001 and $125,000, taxpayers may exclude 50 percent of taxable pension income if married filing jointly, 37.5 percent if single, head of household, or qualifying widow(er), or 25 percent if married filing separately. For total income between $125,001 and $150,000, the percentages drop to 25 percent, 18.75 percent, and 12.5 percent respectively. Above $150,000 in total income, no Retirement Income Exclusion is available at all. A separate Other Retirement Income Exclusion, using Worksheet D, exists for otherwise qualifying taxpayers whose wage and business income totals $3,000 or less. |
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How our partner relationships workSocial Security
New Jersey does not tax Social Security benefits at all, but a companion page on this site covers Social Security taxation in detail. Social Security has its own rules in every state; see the full breakdown in how New Jersey taxes retirement income generally.
Figures verified against the NJ Division of Taxation Retirement Income and Retirement Income Exclusions pages (tax year 2025 chart) on September 30, 2026; the Social Security statement was not re-checked.
Statute and sources
Governing citation: N.J. Div. of Taxation, NJ Income Tax, Retirement Income (njit6.shtml) and Retirement Income Exclusions (njit7.shtml); Tax Topic Bulletin GIT-1&2, Retirement Income.
- New Jersey Division of Taxation, NJ Income Tax, Retirement Income
- New Jersey Division of Taxation, Retirement Income Exclusions (dollar amounts and phase out chart)
Read September 5, 2026.
Related: how New Jersey taxes retirement income generally · does New Jersey tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.
For your own numbers, run the Retirement Tax Comparison Tool (2026): Compare Any Two States.
See Retirement Tax Relocation (2026): The Four Taxes That Change When You Move for the full state by state breakdown.