How will N.J. tax my pension from N.Y.?

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Q. I live in New Jersey but I have a pension from New York. How is it taxed?
— Retired

A. Congrats on your retirement!

Your pension will be taxed as ordinary income, but there’s more to know.

“According to federal law, pensions are taxable to the state in which a person resides, but not taxable to the issuing state if it is not the resident state,” said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.

So that’s good news.

And depending on the amount of your annual income, you may qualify for New Jersey’s pension exclusion.

For the 2018 tax year, if you earned less than $100,000, those married filing jointly can exclude $60,000 of income. It’s $30,000 for those married filing separately, and $45,000 for singles and heads of household.

By 2020, the exclusion amount will reach $100,000 for those married filing jointly, $50,000 for those married filing separately and $75,000 for singles and heads of household.

To qualify, you (and/or your spouse/civil union partner, if filing jointly) are 62 or older or disabled as defined by Social Security guidelines on the last day of the tax year.

Email your questions to moc.p1558569198leHye1558569198noMJN1558569198@ksA1558569198.

This story was originally published in March 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.