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Bill

A 3005

Enacts into law major components of legislation necessary to implement the state public protection and general government budget for the 2025-2026 state fiscal year

2025 Regular Session

Automatically index New Jersey's $6,000 veterans' personal exemption to inflation using CCPI-U each year, boosting the exemption for eligible veterans as prices rise.

SIGNED CHAP.55
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WeVote Research Nonpartisan
Bill Summary · A 3005

Summary — A3005 (SIGNED CHAP.55)

Status: Signed into law (Chapter 55) on May 9, 2025. Introduced January 9, 2024. Effective: immediately.

Purpose

A3005 indexes New Jersey’s veterans’ gross income tax exemption for inflation. The law amends N.J.S.54A:3‑1 to automatically adjust the exemption amount each year so it retains purchasing power over time.

Key provisions

  • Current exemption: preserves the existing veterans’ personal exemption of $6,000.
  • Indexing rule: beginning for tax year 2023, the $6,000 exemption is adjusted annually in direct proportion to the percentage change in the Chained Consumer Price Index for All Urban Consumers (C‑CPI‑U) for the 12‑month period ending August 31 of the immediately preceding tax year.
    • Practical effect: the exemption for an upcoming tax year = prior exemption × (1 + percent change in the C‑CPI‑U for the specified 12‑month period).
    • If the C‑CPI‑U does not increase over that period, the exemption remains unchanged for the applicable tax year.
  • Who qualifies: taxpayers who are veterans honorably discharged or released under honorable circumstances from active duty in the U.S. Armed Forces, a reserve component, or the New Jersey National Guard while in federal active duty status (as defined in N.J.S.38A:1‑1).
  • Other related rules retained:
    • The veterans’ exemption remains part of the personal exemptions schedule in N.J.S.54A:3‑1 (alongside exemptions for spouses, dependents, age, blindness, etc.).
    • Personal exemptions are prorated when a taxable year is shorter than 12 months (15 days or more counts as a month).
    • Nonresident treatment and other statutory provisions remain in place.

Who is affected

  • Primary beneficiaries: eligible New Jersey veterans (as defined above) who currently claim or will claim the $6,000 exemption.
  • Fiscal impact: indexing will likely increase the State’s annual tax expenditure for this exemption over time as inflation rises. The statute does not specify a cap or phase‑out.

Timeline and legislative action

  • Introduced: Assembly Military & Veterans’ Affairs Committee (Jan 9, 2024).
  • Referred to Ways & Means and amended several times in 2025.
  • Passed both houses under a message of necessity and delivered to the Governor on May 8, 2025.
  • Signed and became law (Ch.55) May 9, 2025.
  • Companion Senate bill(s): S875, S3005 (and related print numbers).

Note

Although the statutory text specifies indexing “beginning in tax year 2023,” the law was enacted in 2025; taxpayers and administrators should consult Division of Taxation guidance for any retroactive application or implementation details.

Compiled from official sources — confirm details with the bill’s official record.

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