07 Feb Is there a federal pension exclusion?

Q. I read your answers recently regarding the New Jersey pension exclusion. Is there a federal pension exclusion?
— Taxpayer

A. Like the endless discussion over whether it’s pork roll or Taylor ham, the pension exclusion is a very Jersey thing.

So no, there is no federal pension exclusion.

In New Jersey, residents with income of up to $100,000 — not counting Social Security, which is not taxable in the state — to exclude that income from tax.

If your income is up to $150,000, you can exclude a percentage of your retirement income.

It could be worth meeting with a tax advisor who can review your federal return to see if there are opportunities to lower your tax bill.

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This story was originally published in February 2024.

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