FEDERAL AND STATE INCOME TAXES

Retirement benefits are subject to federal income tax (except for Accidental Disability retirement).  However, if you paid tax on any of your contributions to the retirement system, the portion of your monthly benefit representing a return of those previously-taxed contributions is not taxable.

If you live in New Jersey, your retirement benefit is not subject to New Jersey State income tax until you recover in pension checks the amount of the contributions which you made while working.

If you live outside of New Jersey, check with your home state's tax office to determine if your pension is taxable in your state of residence.

To Learn More...

Watch the video presentation:

• Tax and Retirement Benefits — presentations open in a new window.

See the Fact Sheet for detailed information:

• Fact Sheet #12, Taxation of Retirement Benefits Adobe PDF (45K)
  
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