TAXES 20-30, New Jersey State Tax Income Withholding

Published: December 04, 2020
Effective: Pay Period 23, 2020

Summary

The tax rate on wages over $1,000,000 and up to $5,000,000 for the State of New Jersey has changed from 9.9 percent to 21.3 percent for all tax tables.

No action on the part of the employee or the personnel office is necessary.

Tax Formula

State Abbreviation:	NJ
State Tax Withholding State Code:	34
Acceptable Exemption Form:	NJ W-4 or W-4 (see the Additional Information section)
Basis for Withholding:	State or Federal Exemptions (see the Additional Information section)
Acceptable Exemption Data:	MS/MJ/HH, for 2020 Federal Form W-2
TSP Deferred:	No
Non Federal 401(k) Deferred:	Yes
Additional Information:	Employees who have not previously submitted a NJ W-4 and have submitted a new 2020 Federal Form W-4 will default to Single and zero (S00). Employees who have not previously submitted a NJ W-4 and have not submitted a new 2020 Federal Form W-4 will default to the prior to 2020 Federal Form W-4 submission.

Special Coding:

First Position - Determine the Total Number of Allowances Claimed as follows:

If Item 3 of the NJ-W4 Contains:	Enter:
A	S
B	M
C	C
D	D
E	E

If Item 3 of the NJ-W4 Is Blank and If the Status on Line 2 Is:	Enter:
Single	S
Married/Civil Union Couple Joint	M
Married/Civil Union Couple Separate	C
Head of Household	D
Surviving Spouse/Surviving Civil Union Partner	E

Second and Third Positions - Enter the total number of exemptions claimed in Item 4 of the NJ-W4. If less than 10, precede with a zero (0).

Withholding Formula (Effective Pay Period 23, 2020)

Subtract the nontaxable biweekly non-Federal 401(k) contribution from the gross biweekly wages to obtain the adjusted gross biweekly wages.
Note: Do not subtract the biweekly Federal Thrift Savings Plan (TSP) contribution from the gross biweekly wages.
Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the gross annual wages.
Determine the exemption allowance by applying the following guideline and subtract this amount from the gross annual wages to compute the taxable income:
Exemption Allowance = $1,000 x Number of Exemptions

Apply the taxable income computed in step 3 to the following table(s) to determine the annual New Jersey tax withholding:

Single or Married/Civil Union Couple - Filing Separately (Rate Table A)

If the Amount of Taxable Income Is:	The Amount of New Jersey Tax Withholding Should Be:
Over $0 but not over $20,000	1.5%
Over $20,000 but not over $35,000	$300.00 plus 2.0% of excess over $20,000
Over $35,000 but not over $40,000	$600.00 plus 3.9% of excess over $35,000
Over $40,000 but not over $75,000	$795.00 plus 6.1% of excess over $40,000
Over $75,000 but not over $500,000	$2,930.00 plus 7.0% of excess over $75,000
Over $500,000 but not over $1,000,000	$32,680.00 plus 9.9% of excess over $500,000
Over $1,000,000 but not over $5,000,000	$82,180.00 plus 21.3% of excess over $1,000,000
Over $5,000,000	$934,180.00 plus 11.8% of excess over $5,000,000

Married/Civil Union Couple - Filing Jointly or Head of Household or Surviving Spouse/Surviving Civil Union Partner (Rate Table B)

If the Amount of Taxable Income Is:	The Amount of New Jersey Tax Withholding Should Be:
Over $0 but not over $20,000	1.5%
Over $20,000 but not over $50,000	$300.00 plus 2.0% of excess over $20,000
Over $50,000 but not over $70,000	$900.00 plus 2.7% of excess over $50,000
Over $70,000 but not over $80,000	$1,440.00 plus 3.9% of excess over $70,000
Over $80,000 but not over $150,000	$1,830.00 plus 6.1% of excess over $80,000
Over $150,000 but not over $500,000	$6,100.00 plus 7.0% of excess over $150,000
Over $500,000 but not over $1,000,000	$30,600.00 plus 9.9% of excess over $500,000
Over $1,000,000 but not over $5,000,000	$80,100.00 plus 21.3% of excess over $1,000,000
Over $5,000,000	$932,100.00 plus 11.8% of excess over $5,000,000

Optional Rate Table C

If the Amount of Taxable Income Is:	The Amount of New Jersey Tax Withholding Should Be:
Over $0 but not over $20,000	1.5%
Over $20,000 but not over $40,000	$300.00 plus 2.3% of excess over $20,000
Over $40,000 but not over $50,000	$760.00 plus 2.8% of excess over $40,000
Over $50,000 but not over $60,000	$1,040.00 plus 3.5% of excess over $50,000
Over $60,000 but not over $150,000	$1,390.00 plus 5.6% of excess over $60,000
Over $150,000 but not over $500,000	$6,430.00 plus 6.6% of excess over $150,000
Over $500,000 but not over $1,000,000	$29,530.00 plus 9.9% of excess over $500,000
Over $1,000,000 but not over $5,000,000	$79,030.00 plus 21.3% of excess over $1,000,000
Over $5,000,000	$931,030.00 plus 11.8% of excess over $5,000,000

Optional Rate Table D

If the Amount of Taxable Income Is:	The Amount of New Jersey Tax Withholding Should Be:
Over $0 but not over $20,000	1.5%
Over $20,000 but not over $40,000	$300.00 plus 2.7% of excess over $20,000
Over $40,000 but not over $50,000	$840.00 plus 3.4% of excess over $40,000
Over $50,000 but not over $60,000	$1,180.00 plus 4.3% of excess over $50,000
Over $60,000 but not over $150,000	$1,610.00 plus 5.6% of excess over $60,000
Over $150,000 but not over $500,000	$6,650.00 plus 6.5% of excess over $150,000
Over $500,000 but not over $1,000,000	$29,400.00 plus 9.9% of excess over $500,000
Over $1,000,000 but not over $5,000,000	$78,900.00 plus 21.3% of excess over $1,000,000
Over $5,000,000	$930,900.00 plus 11.8% of excess over $5,000,000

Optional Rate Table E

If the Amount of Taxable Income Is:	The Amount of New Jersey Tax Withholding Should Be:
Over $0 but not over $20,000	1.5%
Over $20,000 but not over $35,000	$300.00 plus 2.0% of excess over $20,000
Over $35,000 but not over $100,000	$600.00 plus 5.8% of excess over $35,000
Over $100,000 but not over $500,000	$4,370.00 plus 6.5% of excess over $100,000
Over $500,000 but not over $1,000,000	$30,370.00 plus 9.9% of excess over $500,000
Over $1,000,000 but not over $5,000,000	$79,870.00 plus 21.3% of excess over $1,000,000
Over $5,000,000	$931,870.00 plus 11.8% of excess over $5,000,000

Divide the annual New Jersey tax withholding calculated in step 4 by the number of pay dates in the tax year to obtain the biweekly New Jersey tax withholding.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) Home page. Select the Publications tab and select U.S. Income Tax Formulas from the Publications menu to launch the tax map. Select the desired State from the map provided for the formula.

Previous Tax Bulletin

Inquiries