If I retire in Philadelphia and move to New Jersey, how much would New Jersey tax my pension?

Nov 18, 2016
askacpaiconNew Jersey taxes pension income as ordinary income, similar to wages, investment income, etc. If you are over 62 and your total income is under a certain amount (varies based upon your circumstances), you may exclude a portion of your retirement income, with the maximum amount based upon your filing status. You may end up being double-taxed on your retirement income in New Jersey. Here is why: Pennsylvania does not allow a deduction for retirement contributions, so the money was taxed by the state when it went in; now it could be taxed again by New Jersey on the way out. Note: Social Security and other retirement income are not taxed in Pennsylvania.
 
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Answered by: David A. Caplan, CPA, is a sole practitioner in Lafayette Hill, Pa.
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