Updated October 16, 2026. Quick answer: Only if you ask. New Jersey’s Form NJ-W-4P is a “CERTIFICATE OF VOLUNTARY WITHHOLDING OF NEW JERSEY GROSS INCOME TAX”, and the form tells a payee who does not expect to owe New Jersey income tax at the end of the year not to request withholding.
More on public pension systems, topic by topic: NJ PFRS ordinary disability, NJ PFRS accidental disability and NJ PFRS service credit purchase.
New Jersey pension withholding at a glance
| Item | What the documents say |
|---|---|
| Is state withholding required on regular pension payments? | No. New Jersey withholds on a pension only if you file Form NJ-W-4P |
| Default rate if you give the payer no form | No default. You name a whole dollar amount of $10 or more per payment |
| Lump sum or one-time payment | The documents read give no separate lump-sum rule |
| Form to start, change or stop it | Form NJ-W-4P, mailed to the payer (the edition read is dated 04-17) |
| Changed for 2026? | No change stated |
What the New Jersey documents say
Form NJ-W-4P is the form a pension or annuity payee uses “to begin, change, or stop withholding New Jersey Income Tax”. You complete it, check one of two boxes (withhold a dollar amount, or stop withholding), sign it and give it to the payer.
There is no percentage and no default. The form says to “Enter a whole dollar amount of $10 or more for each payment”, using a worksheet that subtracts New Jersey tax paid or withheld by other sources from the estimated tax liability and divides the balance by the number of payments.
What a mover should know
This page is about New Jersey as a state of residence. An instruction line written for a nonresident or part-year filer is not the rule for a resident, and none of the documents read settles a part-year or two-state case, so check each state’s own rule. The federal side is the same everywhere; CMG’s federal 20% withholding on a pension lump sum page covers it, state tax withholding on IRA and 401(k) withdrawals in New Jersey covers the account side, and state withholding on retirement withdrawals lists the other states checked.
What the documents do not say
- The form read is dated 04-17 and describes no 2026 change. It gives no lump-sum rule, and the documents read do not say how it interacts with federal withholding.
Common mistakes
- Assuming the payer is withholding for the state because it withholds for the IRS: in a voluntary state nothing is withheld until you give the payer the state’s form.
- Assuming the answer for one state applies to another, or that state withholding settles the state tax owed at filing.
Related: state tax withholding on IRA and 401(k) withdrawals in New Jersey, New Jersey retirement taxes, whether New Jersey taxes pensions, state withholding on retirement withdrawals, and retirement withholding calculator.
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Answer againSources
- Form NJ-W-4P Certificate of Voluntary Withholding of New Jersey Gross Income Tax from Pension and Annuity Payments: https://www.nj.gov/treasury/taxation/pdf/current/njw4p.pdf
- IRS Tax Topic 413, Rollovers from retirement plans: https://www.irs.gov/taxtopics/tc413
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.