19 Dec My retirement income is $60K. Do I have to file a state tax return?

Q. I am retired. I believe all my income — Social Security, a pension from New Jersey and a small annuity withdrawal from a 457 plan — is excluded from New Jersey taxes. They total about $60,000. I have no taxes withheld for the state. Only federal taxes are withheld. If they all qualify as income excluded under state rules, should I still file a New Jersey tax return?
— Taxpayer, maybe?

A. No one wants to pay more in taxes than they need to.

And no one wants to go through the process of filing tax returns if they don’t have to, either.

First, New Jersey does not tax Social Security.

You said that your New Jersey state pension and 457 plan withdrawals are excluded from New Jersey taxation. This isn’t entirely correct.

Your state pension and 457 plan distribution are excluded from New Jersey taxable income if you qualify under the state pension exclusion rules, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

Not everyone is eligible to exclude pension income, he said.

“Since you said that combined income is about $60,000, you do qualify for the pension exclusion,” he said, assuming you’re age 62 or older. “Since all of your income and its source is reported to the state, I don’t believe there would be any problem if you did not file an annual New Jersey income tax return.”

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This story was originally published on Dec. 19, 2022.

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