Update New Jersey 2025 Individual Income Tax Model #7124
Description
Summary
Update the New Jersey individual income tax model to reflect tax year 2025 parameters, add 2025 references with page numbers to all parameters, verify values against official sources, and consider adding new property tax relief programs (ANCHOR, Stay NJ) that can be modeled with existing variables.
Primary References
- 2025 NJ-1040 Form
- 2025 NJ-1040 Instructions
- 2025 NJ-1040NR Instructions (Nonresident)
- NJ Division of Taxation - 2025 Changes
- NJ Tax Rate Tables
Parameter Updates Required
Tax Brackets (5 files) - need 2025 references
All bracket files need 2025 references added. Tax rates unchanged from 2020 (1.4% - 10.75%).
| Parameter File | Current Latest Ref | 2025 Line | Expected Page |
|---|---|---|---|
main/single.yaml |
2024 (page 65) | Line 26 | ~65 |
main/joint.yaml |
2024 (page 65) | Line 26 | ~65 |
main/head_of_household.yaml |
2024 (page 65) | Line 26 | ~65 |
main/separate.yaml |
Needs review | Line 26 | ~65 |
main/surviving_spouse.yaml |
Needs review | Line 26 | ~65 |
Exemptions (7 files) - need 2025 references
All exemption amounts appear unchanged. Need 2025 page references.
| Parameter File | Current Value | 2025 Line | Expected Page |
|---|---|---|---|
exemptions/regular/amount.yaml |
$1,000-$2,000 by status | Line 6 | ~8 |
exemptions/senior/amount.yaml |
$1,000 | Line 7 | ~8-10 |
exemptions/senior/age_threshold.yaml |
65 | Line 7 | ~8-10 |
exemptions/blind_or_disabled/amount.yaml |
$1,000 | Line 8 | ~10 |
exemptions/dependents/amount.yaml |
$1,500 | Lines 10-11 | ~8 |
exemptions/dependents_attending_college/amount.yaml |
$1,000 | Line 12 | ~8-10 |
exemptions/dependents_attending_college/age_threshold.yaml |
22 | Line 12 | ~8-10 |
Deductions (3 files) - need 2025 references
| Parameter File | Current Value | 2025 Line | Expected Page |
|---|---|---|---|
deductions/medical_expenses/rate.yaml |
2% of AGI | Worksheet F | ~25 |
deductions/property_tax/limit.yaml |
$15,000 | Worksheet H | ~30-32 |
deductions/property_tax/qualifying_rent_fraction.yaml |
18% | Line 40a | ~28-30 |
Retirement Exclusions (9 files) - need 2025 references
| Parameter File | Current Value | 2025 Line | Expected Page |
|---|---|---|---|
exclusions/retirement/age_threshold.yaml |
62 | Lines 28a-28b | ~21-22 |
exclusions/retirement/max_amount.yaml |
$50k-$100k by status | Lines 28a-28b | ~21-22 |
exclusions/retirement/other_retirement_income/earned_income_threshold.yaml |
$3,000 | Line 28b | ~22 |
exclusions/retirement/pension/percentage/single.yaml |
Income-tiered | Line 28a | ~21 |
exclusions/retirement/pension/percentage/joint.yaml |
Income-tiered | Line 28a | ~21 |
exclusions/retirement/pension/percentage/head_of_household.yaml |
Income-tiered | Line 28a | ~21 |
exclusions/retirement/pension/percentage/separate.yaml |
Income-tiered | Line 28a | ~21 |
exclusions/retirement/pension/percentage/surviving_spouse.yaml |
Income-tiered | Line 28a | ~21 |
exclusions/retirement/special_exclusion/amount.yaml |
$3,000-$6,000 by status | Line 28b | ~22 |
Credits (8 files) - need 2025 references
| Parameter File | Current Value | 2025 Line | Expected Page |
|---|---|---|---|
credits/eitc/match.yaml |
40% of federal | Line 58 | ~44-45 |
credits/eitc/eligibility/age/min.yaml |
18 | Line 58 | ~44-45 |
credits/ctc/amount.yaml |
$200-$1,000 by income | Line 65 | ~46 |
credits/ctc/age_limit.yaml |
6 (under age 6) | Line 65 | ~46 |
credits/cdcc/rate.yaml |
10%-50% by income | Line 64 | ~45-46 |
credits/property_tax/amount.yaml |
$50 | Line 56 | ~51-52 |
credits/property_tax/age_threshold.yaml |
65 | Line 56 | ~51-52 |
credits/property_tax/income_limit.yaml |
$10k-$20k by status | Line 56 | ~51-52 |
Other Parameters (2 files)
| Parameter File | Current Value | 2025 Line | Expected Page |
|---|---|---|---|
filing_threshold.yaml |
$10k-$20k by status | Filing requirements | ~5 |
gross_income_sources.yaml |
15 income types | N/A | N/A |
New Programs to Add (Can Model with Existing Variables)
1. ANCHOR Program (Property Tax Relief)
Source: NJ ANCHOR Program
The ANCHOR program provides property tax relief based on homeownership status, age, and income. This can be modeled using existing variables.
Benefit Structure (2024/2025):
| Category | Age | Income Limit | Benefit |
|---|---|---|---|
| Homeowner | 65+ | at or below $150,000 | $1,750 |
| Homeowner | 65+ | $150,001-$250,000 | $1,250 |
| Homeowner | under 65 | at or below $150,000 | $1,500 |
| Homeowner | under 65 | $150,001-$250,000 | $1,000 |
| Renter | 65+ | at or below $150,000 | $700 |
| Renter | under 65 | at or below $150,000 | $450 |
Required Variables:
nj_anchor_eligible- eligibility based on residency, property typenj_anchor_benefit- benefit amount based on homeowner/renter, age, income
Required Parameters:
gov/states/nj/treasury/anchor/homeowner/senior/income_threshold/*gov/states/nj/treasury/anchor/homeowner/senior/amount/*gov/states/nj/treasury/anchor/homeowner/non_senior/income_threshold/*gov/states/nj/treasury/anchor/homeowner/non_senior/amount/*gov/states/nj/treasury/anchor/renter/income_limit.yamlgov/states/nj/treasury/anchor/renter/senior/amount.yamlgov/states/nj/treasury/anchor/renter/non_senior/amount.yamlgov/states/nj/treasury/anchor/age_threshold.yaml(65)
2. Stay NJ Program (Starting 2026)
Source: Stay NJ Program
Property tax relief for seniors starting 2026. Can add parameters now.
Eligibility:
- Age 65+
- Income under $500,000
- Owned and occupied home for full year
Benefit Calculation:
- 50% of property taxes, up to $13,000 maximum
- 2024 cap: $6,500
- Calculated after ANCHOR and Senior Freeze benefits
Required Parameters:
gov/states/nj/treasury/staynj/age_threshold.yaml(65)gov/states/nj/treasury/staynj/income_limit.yaml($500,000)gov/states/nj/treasury/staynj/rate.yaml(0.5)gov/states/nj/treasury/staynj/max_property_tax.yaml($13,000)gov/states/nj/treasury/staynj/max_benefit.yaml($6,500)
Tests to Add
2025 Tax Year Tests
Add test cases in existing test files using period: 2025 to verify:
- Tax brackets - Test each filing status with income at bracket boundaries
- Exemptions - Test regular, senior, blind/disabled, dependent, college dependent
- Deductions - Medical expense and property tax deduction scenarios
- Retirement exclusions - Pension exclusion at various income levels
- Credits - EITC (40% match), CTC (income-tiered), CDCC (income-tiered), property tax credit
Integration Test
Add 2025 scenarios to integration.yaml testing the full tax calculation pipeline.
Checklist
Parameter Reference Updates (Add 2025 refs with page numbers)
- Tax bracket files (5 files)
- Exemption files (7 files)
- Deduction files (3 files)
- Retirement exclusion files (9 files)
- Credit files (8 files)
- Filing threshold and other files (2 files)
Value Verification
- Verify all 2025 values against official NJ-1040 instructions
- Document any value changes from 2024
New Programs
- Implement ANCHOR program variables and parameters
- Add Stay NJ parameters (effective 2026)
Tests
- Add 2025 test cases to existing test files
- Add 2025 integration tests
- Add ANCHOR program tests (if implemented)
Notes
- Tax rates have remained unchanged since 2020 (1.4% to 10.75%)
- Most exemption and deduction values appear unchanged
- The CTC age limit changed from age 6 in 2022-2023 to age 5 in 2024+ (verify for 2025)
- EITC match has been 40% since 2020
- ANCHOR and Stay NJ are property tax relief programs separate from the income tax return but can be modeled with existing property tax and demographic variables