Governor Murphy Signs Legislation Excluding Combat Pay from Gross Income Tax

 – September 28, 2020
Governor Murphy Signs Legislation Excluding Combat Pay from Gross Income Tax

Governor Phil Murphy today signed legislation (S2050) to exclude combat pay from gross taxable income under the New Jersey income tax. New Jersey is the only state currently taxing combat pay, which is also untaxed by the federal government. 

“Members of the military put everything on the line for our state and our country.” said Governor Murphy. “I am happy and proud that, even in the midst of our state’s most serious fiscal crisis, we were able to find a way to make life easier for our troops and provide some long-overdue relief to the bravest among us.”

S2050 excludes military pay for service in a combat zone, or for hospitalization as the result of injury while serving in a combat zone, from gross taxable income under the New Jersey income tax. The bill excludes combat pay in the same manner as federal taxation does. A combat zone is defined as any area the President of the United States designates by Executive Order as an area in which the U.S. Armed Forces are engaging or have engaged in combat.

Primary sponsors of S2050 include Senators Shirley K. Turner, Michael L. Testa, Jr., and Kristin M. Corrado, and Assemblymembers Annette Quijano, Cleopatra G. Tucker, and Wayne P. DeAngelo.