NEW JERSEY – Governor Phil Murphy Monday signed legislation (S2050) to exclude combat pay from gross taxable income under the New Jersey income tax. New Jersey is the only state currently taxing combat pay, which is also untaxed by the federal government.
“Members of the military put everything on the line for our state and our country.” Murphy said. “I am happy and proud that, even in the midst of our state’s most serious fiscal crisis, we were able to find a way to make life easier for our troops and provide some long-overdue relief to the bravest among us.”
“All distractions when deployed reduce combat effectiveness. This is a positive action that will pay dividends for our women and men in combat,” said Maj. Gen. Jemal J. Beale, The Adjutant General of New Jersey and Commissioner of the New Jersey Department of Military and Veterans Affairs.
Primary sponsors of S2050 include Senators Shirley K. Turner, Michael L. Testa, Jr., and Kristin M. Corrado, and Assemblymembers Annette Quijano, Cleopatra G. Tucker, and Wayne P. DeAngelo.
“Previous versions of this important bill have languished in the Legislature for 10 years. When I was sworn into the Senate in January, I made this one of my priorities and began advocating for its passing and enactment on behalf of American servicemen and women,” Senator Michael Testa said. “I am proud that working with colleagues on both sides of the aisle, we are finally reversing the insensitive policy, and I thank the Governor for his support.”
“I am proud today of Gov. Murphy and the State of New Jersey for adopting the combat zone state tax exemption. It must have been a difficult decision to make in challenging financial times,” said Lt. Col. Peter Lupo, Vice President of Legislative Affairs, New Jersey Veterans Chamber of Commerce. For that reason, New Jersey soldiers will be deeply appreciative. I can personally attest to that.”
S2050 excludes military pay for service in a combat zone, or for hospitalization as the result of injury while serving in a combat zone, from gross taxable income under the New Jersey income tax. The bill excludes combat pay in the same manner as federal taxation does. A combat zone is defined as any area the President of the United States designates by Executive Order as an area in which the U.S. Armed Forces are engaging or have engaged in combat.