Reminder: There Are 5 New Tax Cuts in 2017

Date: January 17, 2017

These are the reductions traded for the gas tax.

The long-disputed gas tax hike—a staggering 23-cent-per-gallon increase—that was approved in 2016 already took effect in November, and you’ve no doubt noticed the difference at the pump. However, there are also a handful of other tax changes that took effect as of Jan. 1, passed in exchange for the gas tax. Here’s a refresher:

Estate Tax

Previously, estates of up to $675,000 were exempt from New Jersey’s estate tax. Now, the threshold has risen to $2 million, and the tax will be eliminated entirely on Jan. 1, 2018.

Sales Tax

New Jersey’s sales and use tax has decreased to 6.875 percent from 7 percent and will decrease another two-eighths of a point on Jan. 1, 2018. Click here for more information on how to plan accordingly.

Retirement Income

New Jersey residents who are 62 and older can exclude up to $40,000 in pension and other retirement income—such as annuity income and savings account withdrawals—from their taxes. This has increased from $20,000 in 2016 and will rise again to $100,000 in 2020. Individuals and those married but filing separately can now exempt $15,000, up from $10,000.

Earned Income Tax Credit

The state’s EITC, which reduces tax payments for low- and moderate-income workers—has increased by 5 percent from 2016 and is now 35 percent of the federal EITC.

Veteran Exemption

Veterans who have been honorably discharged or released from service can now claim an annual tax exemption of $3,000.

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