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Bill

Bill

A 5674

Excludes certain retirement savings plan contributions, withdrawals, and rollovers from gross income tax.

2024-2025 Regular Session Introduced by Bob Auth and 3 co-sponsors

New Jersey bill excludes qualified retirement plan contributions and rollovers from state income tax to incentivize savings, reducing state tax revenue while benefiting retirement-eligible savers.

Introduced in the Assembly, Referred to Assembly Financial Institutions and Insurance Committee
#incometax
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WeVote Research Nonpartisan
Bill Summary · A 5674

Legislative bill overview

A.5674 proposes to exclude certain retirement savings plan contributions, withdrawals, and rollovers from New Jersey's gross income tax calculation. The bill would provide tax relief to residents who save for retirement through qualified plans, potentially reducing their state tax burden. The specific retirement vehicles covered and income thresholds would be defined within the legislation.

Why is this important

Retirement security is a significant concern for working New Jersey residents, and tax incentives can meaningfully increase savings rates by improving after-tax returns. This could particularly affect middle and upper-income earners who have capacity to save beyond Social Security. However, the tax exclusion represents foregone state revenue that must be balanced against other budget priorities.

Potential points of contention

  • Revenue impact: The bill would reduce state tax collections; the fiscal note will be critical to understanding whether this is affordable given New Jersey's budget constraints
  • Scope ambiguity: The term "certain retirement savings plans" is vague—coverage could range from traditional IRAs and 401(k)s to newer savings vehicles, affecting how many residents benefit
  • Equity concerns: Tax-advantaged retirement savings primarily benefit higher-income earners who can afford to contribute; this may increase wealth inequality if not carefully designed with income limitations

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

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