Tax Savings, Tax Credits & Retirement Savings Focus of Discussion 

TRENTON – In a “TeleTown Hall” with members of AARP today, Senate President Steve Sweeney stressed the recent actions that will help make New Jersey more affordable for senior citizens, including increased tax exemptions on retirement income, a tax credit for veterans and a retirement savings plan. The interactive forum hosted by AARP allowed its members in the 3^rd Legislative District to discuss the affordability issues with Senator Sweeney.

“We need to do what we can to help make New Jersey more affordable for seniors to remain in the state during their retirement years,” said Senator Sweeney. “Living on a fixed income in retirement can make affordability a real challenge for those who want to remain in their home communities and near their families. That is why we worked to provide greater tax relief on retirement income, added a tax deduction for veterans and established an incentive program for retirement savings.”

The recently-enacted tax relief plan will allow seniors earning up to $100,000 in taxable income to pay no state income taxes. When fully phased in, the exemption for couples would cover $100,000 and $75,000 for individuals. Under the current tax structure, individuals are able to exclude up to $15,000 of retirement income from state income taxes and couples are allowed to exclude up to $20,000.

“Increasing the retirement income tax exemption is another way to make life easier for retirees,” said Senator Sweeney. “It’s important that New Jersey keep pace with our neighboring states so our retirees aren’t forced to choose between lower costs or remaining in state.”

New York allows couples to exclude up to 20 thousand dollars for individuals and 40 thousand dollars for couples.  Pennsylvania does not tax private or public pension income at all.”

The Legislature also established a new tax credit for veterans and created the Secure Choice Savings Plan for retirees. Veterans will now have an additional $3,000 via a tax credit. And Secure Choice, an initiative supported by AARP, creates a program for employees to establish individual retirement savings accounts via an automatic payroll deduction at work.  Participation is voluntary for workers and gives them the security of a convenient, low cost, portable way to save for their retirement.

Senator Sweeney also discussed efforts to grow jobs, protect farmland and his plan to reform the distribution of state school aid by bringing every school district to 100 percent, full funding.