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Bill

A 2557

Provides gross income tax exclusion for military compensation paid to State residents for out-of-State military service.

2026-2027 Regular Session Introduced by Rosy Bagolie and 3 co-sponsors

New Jersey bill excludes military compensation from state income tax for residents serving outside the state, providing tax relief to military personnel.

Introduced, Referred to Assembly Military and Veterans' Affairs Committee
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Bill Summary · A 2557

Legislative bill overview

Bill A 2557 would allow New Jersey residents serving in the military outside of New Jersey to exclude their military compensation from New Jersey state gross income tax liability. This creates a tax break specifically for out-of-state military service while maintaining tax obligations for those serving within the state.

Why is this important

Military compensation is often modest relative to civilian equivalent roles, and this exclusion could provide meaningful financial relief to service members and their families. The bill recognizes the unique circumstances of military personnel stationed away from their home state, addressing a potential tax burden that other states may or may not impose on their military residents.

Potential points of contention

  • Revenue impact: The bill reduces state tax revenue; fiscal analysis would be needed to determine cost to the state budget and whether other taxpayers might offset this burden.
  • Definitional scope: Unclear whether "military compensation" includes only base pay or also housing allowances, enlistment bonuses, and other forms of military income, potentially affecting who qualifies.
  • Fairness questions: Creates different tax treatment for similar income based on where service occurs; some may argue in-state military personnel should receive equal treatment, while others question why out-of-state service warrants special exemption.

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

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