Q. Does income from New Jersey municipal bonds get excluded from income when determining whether a person is eligible for the pension exclusion?
A. Muni bonds are a great way to get tax-free income.
Good that you’re asking, though, about whether or not it counts for the new retiree tax break.
The eligibility of New Jersey’s pension exclusion is based on total New Jersey taxable income before the exclusion or any available deductions, said Megan Newby, a certified public accountant with Wilkin & Guttenplan in East Brunswick.
“New Jersey municipal bonds are tax-exempt for New Jersey state tax purposes, so income from such bonds are not included in the gross income used to determine an individual’s pension exclusion eligibility,” Newby said.
So you’re in luck. Hope you otherwise qualify for the break.
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