Updated October 24, 2026. Quick answer: Line 28a of the 2025 NJ-1040 is the pension and retirement exclusion. It lets you exclude all or part of the income reported on line 20a if you meet an age or disability test and an income test written against line 27. You compare Line A, your line 20a amount, with Line B, the figure from a chart by filing status and income, and enter the lesser.
What this line asks
The form labels line 28a as the pension and retirement exclusion and points you to the instructions. The booklet opens with “You can exclude all or part of the income reported on line 20a” “if you meet the following qualifications:” The income being reduced is the taxable pension income covered in NJ-1040 line 20a.
Who it applies to
The booklet lists two qualifications. The first is an age or disability test, and it covers a spouse on a joint return: you “were age 62 or older or blind/disabled as defined by Social Security guidelines on the last day of the tax year”. The second is an income test: “Your income on line 27 is $150,000 or less (part-year residents see below).” The line 27 total is explained in NJ-1040 line 27.
For joint filers the booklet adds a limit: “If only one spouse is 62 or older or disabled, enter only the pension income of that spouse.” “You cannot exclude the pension income of the spouse who is younger than 62 and not disabled.”
What the instructions say to enter
The booklet sets out a two-line method under the heading Determining Your Exclusion Amount. Each row below is one step.
| Step | What the booklet says |
|---|---|
| Qualification 1 | “were age 62 or older or blind/disabled as defined by Social Security guidelines on the last day of the tax year” |
| Qualification 2 | “Your income on line 27 is $150,000 or less (part-year residents see below).” |
| Line A | “Amount from line 20a” |
| Line B | “Amount for your filing status and income using the chart below” |
| Joint filers | “If only one spouse is 62 or older or disabled, enter only the pension income of that spouse.” |
| The result | “Enter on line 28a the lesser of line A or line B.” |
The booklet points to more reading: “For more information, see GIT-1 & 2, Retirement Income.”
The figures the line prints
Line B comes from a chart printed under the heading for Line B in the booklet’s line 28a instructions. The chart has a column for each filing status and income range, and its cells are not read on this page. Open the booklet and use the chart row for your own filing status and the column for your line 27 income. The one cap that sits in a running sentence is the income limit in the second qualification, which reads “$150,000 or less”.
Where the result goes next
The result of the method is “Enter on line 28a the lesser of line A or line B.” The next line adds exclusions together: “Add lines 28a and 28b and enter the total.” Line 28b is covered in NJ-1040 line 28b. For the state-level picture see New Jersey retirement taxes, whether New Jersey taxes pensions and New Jersey and Social Security.
Part-year residents
The booklet prints a paragraph for part-year residents. The income test looks at the whole year: “Your income for the entire year must have been $150,000 or less to qualify for the exclusion.” It then explains how Line B is adjusted: you “prorate the maximum exclusion amount from the chart above based on the number of months you were a New Jersey resident” and it separates two cases by whole-year income. The booklet ends the paragraph with “If your income for the entire year is over $100,000, do not prorate the exclusion amount.”
Edition and line numbers
This page reads the 2025 NJ-1040 New Jersey Resident Return booklet, the current file the New Jersey Division of Taxation served on 2026-10-24. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Excluding the pension income of a spouse under 62 on a joint return. The booklet says “You cannot exclude the pension income of the spouse who is younger than 62 and not disabled.”
- Entering Line B instead of the smaller figure. The booklet says “Enter on line 28a the lesser of line A or line B.”
- Prorating Line B when the whole-year income is high. The booklet says “If your income for the entire year is over $100,000, do not prorate the exclusion amount.”
Related: New Jersey retirement taxes, whether New Jersey taxes pensions, New Jersey and Social Security, New Jersey 401(k) and IRA withdrawals, and NJ-1040 pension exclusion lines 20a to 28c.
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Answer againSources
- 2025 NJ-1040 New Jersey Resident Return booklet (instructions and forms), New Jersey Division of Taxation: www.nj.gov
- 2025 Form NJ-1040 New Jersey Resident Income Tax Return, New Jersey Division of Taxation: www.nj.gov
Read from the state revenue documents linked above on October 24, 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.