The rate also aligns with the current rate on incomes in excess of $5 million effective in 2019.Įmployers should note that for purposes of calculating withholding tax for the 2020 taxable year, withholding by every employee from salaries, wages and remuneration paid by an employer for services rendered in excess of $1 million, but not over $5 million, will be at a rate of 21.3%, effective no later than Nov. The new rate is a 1.78% increase from the previous 8.97% tax rate for taxpayers with incomes between $1 million and less than $5 million. Millionaire’s taxĪssembly Bill 10 subjects taxpayers with taxable income in excess of $1 million to a 10.75% total tax rate effective for taxable years beginning on or after Jan. Noteworthy with upcoming federal elections, the bill includes a suspension clause that would suspend the surtax should the federal corporate tax rate increase to a rate of at least 35% of taxable income.įor taxpayers effected by this retroactive change, all underpayment penalties will be waived. The surtax was originally enacted for tax years beginning on or after Jan.
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Additionally, the surtax will no longer decrease after the first two years as originally enacted. 31, 2021, has now been extended through Dec. The surtax, which was previously set to expire on Dec.
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Surtax for corporate taxpayersĪssembly Bill 4721 extends the previously enacted 2.5% temporary surtax for taxpayers with allocated net income (entire net income) in excess of $1 million. The highlights of the FY2021 budget and corresponding tax bills include an extension of the previously enacted corporate tax surcharge and an expansion of the previously approved ‘millionaire’s’ tax, increasing the individual tax rate for taxpayers with revenue in excess of $1 million to 10.75%. Phil Murphy signed the 2021 Fiscal Budget, including in excess of $700 million in tax increases poised to assist the state in recovering from a projected budget deficit due to the coronavirus pandemic.