Updated October 4, 2026. Quick answer: No. The 2025 NJ-1040 instructions list “United States military pensions and survivor’s benefit payments” as not taxable and tell the filer not to include them on the return, and print no dollar cap or income test.
How New Jersey treats military retired pay
| Item | What the documents say |
|---|---|
| Treatment | Military pensions and survivor’s benefit payments are not taxable and are not reported on the return |
| Cap or income test | None printed |
| Rate on other income | The 2025 rate schedules print rates from .014 to .1075 of New Jersey taxable income, by bracket |
| Gap | The booklet text read does not name a statute section for this treatment |
A $30,000 example
A retiree with $30,000 of U.S. military pension owes New Jersey tax on none of it and leaves it off the return.
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What changes in 2026
No 2026 change is printed in the documents read.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Publication 3, Armed Forces’ Tax Guide.
Related: whether New Jersey taxes pensions, how New Jersey taxes retirement income, military retirement pay by state, and the military retirement calculator.
Sources
- 2025 NJ-1040 New Jersey Resident Return instruction booklet: https://www.nj.gov/treasury/taxation/pdf/current/1040i.pdf
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.