Updated October 19, 2026. Quick answer: On the New Jersey NJ-1040, line 20a is where taxable pension, annuity and IRA income goes and line 20b holds the excludable portion. Lines 28a and 28b are the pension and other retirement income exclusions, and line 28c adds them. The total is subtracted from line 27 to reach New Jersey gross income on line 29.
What this form does
These are lines on the New Jersey resident return, NJ-1040, and the instructions open line 20a with a plain statement: “Retirement income such as pensions, annuities, and certain IRA withdrawals is taxable in New Jersey.” “The New Jersey taxable amount may be different from the federal amount.” See New Jersey retirement taxes for the state overview.
The exclusions come later: “You can exclude all or part of the income reported on line 20a” if you meet the conditions listed under line 28a.
Who it applies to
For line 28a the instructions list two conditions: “You (and/or your spouse if filing jointly) were age 62” “or older or blind/disabled as defined by Social Security” guidelines on the last day of the tax year, and “Your income on line 27 is $150,000 or less”.
For joint filers the instructions add: “Joint Filers: If only one spouse is 62 or older or disabled, enter only the pension income of that spouse.”
For line 28b: “If you are filing jointly and only one spouse is 62 or older, only the income of that spouse can be excluded.”
Part-year residents have their own rule: “Include only the taxable amounts you received while you were a resident of New Jersey.”
The lines, one by one
| Line | What the form says |
|---|---|
| Line 20a | “Taxable Pension, Annuity, and” IRA Distributions/Withdrawals. “Enter the taxable portion on line 20a.” |
| Line 20b | “Enter the excludable portion of any distribution you received from a contributory pension, annuity, or IRA.” |
| Line 27 | “Add lines 15 through 26 (do not include lines 16b and 20b) and enter the total.” |
| Line 28a | “You can exclude all or part of the income reported on line 20a” “if you meet the following qualifications” |
| Line 28a, Line A | “Amount from line 20a” |
| Line 28a, Line B | “Amount for your filing status and” income using the chart in the instructions |
| Line 28a result | “Enter on line 28a the lesser of line A or line B.” |
| Line 28b | “If you were 62 or older on the last day of the tax year, you may be able to use the other retirement income exclusion.” |
| Line 28c | “Add lines 28a and 28b and enter the total.” |
| Line 29 | “Subtract line 28c from line 27 and enter the result.” “If zero or less, make no entry.” |
Line 28a also has a separate unclaimed-exclusion rule on line 28b: “If you did not use your entire maximum exclusion on line 28a, you may be able to use the unclaimed portion.” The exclusion amounts for line 28a are printed in a chart by filing status and income in the instructions; this page does not reproduce that chart, so read the maximum for your status there.
The figures the form prints
One figure sits in a single running line: for line 28a the instructions say “Your income on line 27 is $150,000 or less”. The chart under line B (filing status by income band) is a multi-column table and is not read here.
What goes on line 20a and line 20b
The instructions describe plan types. “Noncontributory. You made no contributions to your plan.” “Amounts you receive from these plans are fully taxable.” “Enter the amount from your 1099-R on line 20a.”
For contributory plans: “Since you have already been taxed on your contributions, you” “must determine which portion of your distribution is taxable” and which is excludable. For IRAs: “If you made a withdrawal from an IRA, do not complete Worksheet A or B. Instead, complete Worksheet C.”
The instructions say where each part lands: “Report the taxable amount on line 20a and the excludable amount on line 20b.”
Where the result goes next
Line 28c is the sum: “Add lines 28a and 28b and enter the total.” Line 29 then uses it: “Subtract line 28c from line 27 and enter the result.” The federal side of the same payments is covered on Form 1040 line 5a and 5b and Form 1040 line 4a and 4b, and the 1099-R figures are explained in 1099-R boxes explained.
Edition and line numbers
This page reads the 2025 NJ-1040 New Jersey Resident Return instructions for tax year 2025, the current file New Jersey Division of Taxation served on 2026-10-19. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Claiming the exclusion on a joint return for a spouse who does not qualify. The instructions say “You cannot exclude the pension income of the spouse who is younger than 62 and not disabled.”
- Reporting a rollover. The instructions say “do not report the rollover on line 20a or 20b if it qualifies for deferral for federal tax purposes.”
- Using Worksheet A or B for an IRA withdrawal. The instructions say “do not complete Worksheet A or B. Instead, complete Worksheet C.”
Related: New Jersey retirement taxes, whether New Jersey taxes pensions, New Jersey 401(k) and IRA withdrawals, Form 1040 line 4a and 4b, and 1099-R boxes explained.
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Answer againSources
- 2025 NJ-1040 New Jersey Resident Return instructions, New Jersey Division of Taxation: www.nj.gov
- Related official page (not quoted): New Jersey Division of Taxation, Retirement Income Exclusions: www.nj.gov
Read from the state revenue documents linked above on October 19, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the state revenue department is the right place to confirm anything consequential.