Q. Im retired. I have a pension of just under $30,000 and additional retirement income from my 401(k) and gains on investment accounts. The total is less than $100,000. Can I claim the pension exclusion?

Happy senior

A. Weve got good news for you, but the exact amount of income you can exclude will depend on the total income and the year.

Pensions and retirement account distributions can be excluded from income in New Jersey.

Up to $60,000 could be excluded for 2018, $80,000 for 2019, and it rises to full $100,000 by 2020, said Martin Hauptman, an attorney with Mandelbaum Salsburg in Roseland.

He said many retirees will pay zero income tax under this new tax law.

Importantly, the exclusion is only available to those with New Jersey taxable income of $100,000 or less, Hauptman said,

If you go even $1 over the $100,000 income limitation, you will owe New Jersey income tax on all of your income - except Social Security- not just the income over $100,000, he said.

Hauptman notes that New Jersey taxable income does not include Social Security income, but it does include all other sources of income such as wages, pensions, retirement plans, interest, dividends and more.

Email your questions to Ask@NJMoneyHelp.com.

Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.coms weekly e-newsletter.

Follow this link:
Im retired. Do I have to pay tax on my retirement income? - NJ.com