23 Jan Can we get the pension exclusion if only one of us is older?

Q. My husband just turned 65, but I’m only 59. Can we file for the pension exclusion and how does it work?
— Hopeful

A. That’s a great question.

Lots of couples face the same question.

Let’s go over the pension exclusion.

It allows taxpayers to exclude a portion of their pension benefits if they meet an age and income test, said Howard Hook, a certified financial planner and certified public accountant with EKS Associates in Princeton.

The age test, which you are referring to, is for those aged 62 and older. The pensioner must be age 62 or older as of Dec. 31 of the tax year for which a pension exclusion is requested, Hook said.

The income test for a married couple filing jointly is $150,000. If the combined income is $150,000 or greater, then no exclusion is allowed, he said.

“The $150,000 includes the pension income as well as all other taxable income, including the spouse who is not requesting the pension exclusion,” he said. “Note that the income test fully phases out at $150,000, but the exclusion begins to reduce at $100,000 of income.”

So, in your case, if your husband were the one receiving the pension income and your combined New Jersey gross income is under $100,000 — including his pension — then you could exclude his pension income from New Jersey tax, Hook said.

If your combined income exceeds $100,000 but not $150,000, then a reduced exclusion can be claimed. If the income is $150,000 or more, no pension exclusion is allowed, he said.

“If you and not your husband is the person receiving the income then no pension exclusion is allowed since you do not individually meet the age test,” he said.

The exclusion is reported on the New Jersey income tax return as a reduction of your New Jersey gross income, Hook said.

“The gross pension is reported as part of the calculation of the New Jersey gross income, and then, if you qualify, it is then subtracted in determining New Jersey taxable income,” he said. “Tax software and New Jersey tax preparers should be able to easily handle the qualification and reporting of any amounts excluded, assuming they have your birthdates and tax documents reporting the gross pension received.”

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This story was originally published in January 2026. 

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