WeVote
Log In

Bill

AC

Bill

A 5121

Increases gross income tax rates for taxpayers with taxable income exceeding $2,000,000.

2026-2027 Regular Session Introduced by Alixon Collazos-Gill and 3 co-sponsors

In New Jersey, A-5121 raises the top state gross income tax rate for taxpayers with taxable income over $2,000,000.

Introduced, Referred to Assembly State and Local Government Committee
0
WeVote Research Nonpartisan
Bill Summary · A 5121

Bill overview

  • Jurisdiction: New Jersey
  • Session: 222
  • Bill number: A-5121
  • Title: Increases gross income tax rates for taxpayers with taxable income exceeding $2,000,000
  • Action history: Introduced and referred to the Assembly State and Local Government Committee on May 18, 2026

Purpose and intent

The bill seeks to modify the New Jersey gross income tax by raising the tax burden on high-income earners. Specifically, it targets taxpayers whose taxable income exceeds $2,000,000 and increases their marginal gross income tax rates. The goal is to generate additional revenue for state programs and services by imposing a higher tax rate on top earners.

Key provisions and changes

  • Taxpayer threshold: Applies to individuals (and potentially joint filers, depending on bill language) with taxable income greater than $2,000,000.
  • Rate increase: Imposes a higher marginal gross income tax rate on the portion of taxable income above the $2,000,000 threshold. The exact rate percentage and the structure (e.g., single-rate uplift versus bracketed increases) are defined in the bill text.
  • Scope of taxation: Applies to New Jersey gross income for state tax purposes. It is not necessarily a deduction or credit modification but an adjustment to the rate for high-income brackets.
  • Effective date: The bill would specify when the new rate takes effect (e.g., in the tax year following enactment, or a specified future year). The precise date is in the bill’s provisions.
  • Interaction with existing taxes: The change is additive to the current graduated income tax system; it does not necessarily repeal any existing brackets but adds or increases a top-end rate for the stated threshold.

Who would be affected

  • Primary impact: Taxpayers with taxable income exceeding $2,000,000 in the applicable tax year.
  • Secondary impact: Could influence high-income households, investors, business owners, and professionals whose compensation or realized taxable income places them above the threshold.
  • Economic considerations: Potential effects on behavior related to income timing, investments, and charitable giving, as well as potential changes in state revenue projections.

Procedural and timeline aspects

  • Status: Introduced and referred to the Assembly State and Local Government Committee.
  • Next steps: Committee review, potential amendments, votes in the Assembly, and advancement to the Senate for consideration. If enacted, the governor’s signature would be required to become law.
  • Sunset or continuation: The bill text would specify whether the higher rate is permanent or temporary, including any sunset provisions or review dates.

Potential impacts and considerations

  • Revenue impact: A higher top marginal rate could increase state revenue, though effects depend on taxpayer behavior and compliance.
  • Equity and policy considerations: The bill addresses revenue needs from very high-income residents but may raise questions about tax burden distribution and competitiveness with neighboring states.
  • Administrative considerations: States’ tax departments would implement the new rate, update forms, and ensure proper withholding and estimated payment calculations for high-income filers.

If you’d like, I can tailor this summary to include specific details from the bill’s text (e.g., the exact new rate, bracket structure, and any exemptions or credits associated with the top tier).

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

Sign in to ask a question.