ASSEMBLY FINANCIAL INSTITUTIONS AND INSURANCE
COMMITTEE
STATEMENT TO
ASSEMBLY, No. 512
with committee amendments
STATE OF NEW JERSEY
DATED: FEBRUARY 13, 2023
The Assembly Financial Institutions and Insurance Committee
reports favorably and with committee amendments Assembly Bill No.
512.
As amended, this bill provides taxpayers a gross income tax
exclusion in the amount of contributions made to certain retirement
plans, and allows a deduction for contributions to individual retirement
accounts, or premiums paid to individual retirement annuities, that
qualify for federal income tax deductions.
The affected types of plans are: (1) a plan established under section
401(a) or section 401(k) of the federal Internal Revenue Code; (2)
amounts paid for annuity contracts under section 403(b) of the federal
Internal Revenue Code, allowed to employees of governments and
nonprofits; (3) a deferred compensation plan of a state or local
government that meets the requirements of section 457 of the federal
Internal Revenue Code; (4) a federal Thrift Savings Plan; or (5) a
standard Individual Retirement Account pursuant to section 408 of the
federal Internal Revenue Code. The contributions to these plans are
taxed upon distribution from the account.
The bill applies to contributions made or premiums paid in taxable
years beginning on or after January 1 next following enactment of the
bill.
This bill was pre-filed for introduction in the 2022-2023 session
pending technical review. As reported, the bill includes the changes
required by technical review, which has been performed.
As amended and reported, this bill is identical to the Senate
Committee Substitute for Senate Bill Nos. 737 and 951, as also
amended and reported by the committee.
COMMITTEE AMENDMENTS:
The committee amended the bill to:
(1) make its provisions apply to contributions made or premiums
paid in taxable years beginning on or after the first day of January
following enactment of the bill; and 2
(2) provide that the method of determining the taxable portion of a
distribution from an employee trust, plan, or fund is to be the same as
the method used for determining the taxable portion of a distribution
for the purposes of the federal Internal Revenue Code of 1986 (26
U.S.C. s.1 et seq.).