New Jersey 2024-2025 Regular Session

New Jersey Senate Bill S4098 Compare Versions

Only one version of the bill is available at this time.

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1	1	SENATE, No. 4098 STATE OF NEW JERSEY 221st LEGISLATURE INTRODUCED FEBRUARY 3, 2025
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3	3	SENATE, No. 4098
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5	5	STATE OF NEW JERSEY
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7	7	221st LEGISLATURE
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11	11	INTRODUCED FEBRUARY 3, 2025
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15	15	Sponsored by: Senator CARMEN F. AMATO, JR. District 9 (Ocean) Senator LATHAM TIVER District 8 (Atlantic and Burlington) SYNOPSIS Excludes all New Jersey Lottery winnings from gross income tax and eliminates related withholding requirements. CURRENT VERSION OF TEXT As introduced.
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19	19	Sponsored by:
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21	21	Senator CARMEN F. AMATO, JR.
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23	23	District 9 (Ocean)
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25	25	Senator LATHAM TIVER
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27	27	District 8 (Atlantic and Burlington)
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37	37	SYNOPSIS
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39	39	Excludes all New Jersey Lottery winnings from gross income tax and eliminates related withholding requirements.
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43	43	CURRENT VERSION OF TEXT
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45	45	As introduced.
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49	49	An Act concerning the exclusion of New Jersey Lottery winnings from gross income tax and amending N.J.S.54A:6-11 and N.J.S.54A:7-1. Be It Enacted by the Senate and General Assembly of the State of New Jersey: 1. N.J.S.54A:6-11 is amended to read as follows: 54A:6-11. Lottery Winnings. Gross income shall not include lottery winnings from the New Jersey Lottery [, except that New Jersey Lottery winnings from a prize in an amount exceeding $10,000 shall be included in gross income]. (cf: P.L.2009, c.69, s.3) 2. N.J.S.54A:7-1 is amended to read as follows: 54A:7-1. Requirement of withholding tax from wages. (a) General.--From and after September 1, 1976, every employer maintaining an office or transacting business within this State and making payment of any wages subject to New Jersey personal income tax or making payment of any remuneration for employment subject to contribution under the New Jersey "unemployment compensation law" pursuant to R.S.43:21-1 et seq. that is subject to New Jersey personal income tax to a resident or nonresident individual shall deduct and withhold from such wages for each payroll period a tax computed in such manner as to result, so far as practicable, in withholding from the employee's wages during each calendar year an amount substantially equivalent to the tax reasonably estimated to be due resulting from the inclusion in the employee's New Jersey income of his wages received during such calendar year. The method of determining the amount to be withheld shall be prescribed by regulations of the director, with due regard to the withholding exemptions of the employee. (b) Withholding exemptions.--For purposes of this section: An employee shall be entitled to the equivalent of the same number of New Jersey withholding exemptions as the number of withholding exemptions to which he is entitled for Federal income tax withholding purposes. An employer may rely upon the number of Federal withholding exemptions claimed by the employee. (c) The payor of New Jersey gambling winnings shall withhold New Jersey gross income tax on those winnings at a rate of 3% in all instances where the payor is required to withhold for federal income tax purposes under subsection (q) of section 3402 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.3402), as amended, except that this subsection shall not apply to the New Jersey State Lottery[, except if winnings paid by the New Jersey State Lottery are included in gross income pursuant to N.J.S.54A:6-11. The rate of withholding for gambling winnings paid by the New Jersey State Lottery shall be determined by the director]. (cf: P.L.2009, c.69, s.4) 3. This act shall take effect immediately and apply to taxable years beginning on or after the January 1 next following the date of enactment. STATEMENT This bill provides that all New Jersey Lottery winnings are excluded from the gross income tax and removes withholding requirements for New Jersey Lottery winnings that exceed $10,000 in value. Under current law, New Jersey Lottery winnings in excess of $10,000 are taxable under the gross income tax, and the New Jersey State Lottery is required to withhold a percentage of these prize winnings for gross income tax purposes. Currently, the Director of the Division of Taxation in the Department of the Treasury determines the withholding rate. This bill excludes New Jersey Lottery winnings in excess of $10,000 from gross income. Accordingly, all winnings from the New Jersey Lottery would be excluded from the gross income tax. As part of this exclusion, the bill also removes the New Jersey State Lottery's authority to withhold a percentage of such winnings for gross income tax purposes.
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51	51	An Act concerning the exclusion of New Jersey Lottery winnings from gross income tax and amending N.J.S.54A:6-11 and N.J.S.54A:7-1.
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55	55	Be It Enacted by the Senate and General Assembly of the State of New Jersey:
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59	59	1. N.J.S.54A:6-11 is amended to read as follows:
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61	61	54A:6-11. Lottery Winnings. Gross income shall not include lottery winnings from the New Jersey Lottery [, except that New Jersey Lottery winnings from a prize in an amount exceeding $10,000 shall be included in gross income].
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63	63	(cf: P.L.2009, c.69, s.3)
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67	67	2. N.J.S.54A:7-1 is amended to read as follows:
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69	69	54A:7-1. Requirement of withholding tax from wages.
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71	71	(a) General.--From and after September 1, 1976, every employer maintaining an office or transacting business within this State and making payment of any wages subject to New Jersey personal income tax or making payment of any remuneration for employment subject to contribution under the New Jersey "unemployment compensation law" pursuant to R.S.43:21-1 et seq. that is subject to New Jersey personal income tax to a resident or nonresident individual shall deduct and withhold from such wages for each payroll period a tax computed in such manner as to result, so far as practicable, in withholding from the employee's wages during each calendar year an amount substantially equivalent to the tax reasonably estimated to be due resulting from the inclusion in the employee's New Jersey income of his wages received during such calendar year. The method of determining the amount to be withheld shall be prescribed by regulations of the director, with due regard to the withholding exemptions of the employee.
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73	73	(b) Withholding exemptions.--For purposes of this section:
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75	75	An employee shall be entitled to the equivalent of the same number of New Jersey withholding exemptions as the number of withholding exemptions to which he is entitled for Federal income tax withholding purposes. An employer may rely upon the number of Federal withholding exemptions claimed by the employee.
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77	77	(c) The payor of New Jersey gambling winnings shall withhold New Jersey gross income tax on those winnings at a rate of 3% in all instances where the payor is required to withhold for federal income tax purposes under subsection (q) of section 3402 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.3402), as amended, except that this subsection shall not apply to the New Jersey State Lottery[, except if winnings paid by the New Jersey State Lottery are included in gross income pursuant to N.J.S.54A:6-11. The rate of withholding for gambling winnings paid by the New Jersey State Lottery shall be determined by the director].
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79	79	(cf: P.L.2009, c.69, s.4)
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83	83	3. This act shall take effect immediately and apply to taxable years beginning on or after the January 1 next following the date of enactment.
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89	89	STATEMENT
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93	93	This bill provides that all New Jersey Lottery winnings are excluded from the gross income tax and removes withholding requirements for New Jersey Lottery winnings that exceed $10,000 in value.
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95	95	Under current law, New Jersey Lottery winnings in excess of $10,000 are taxable under the gross income tax, and the New Jersey State Lottery is required to withhold a percentage of these prize winnings for gross income tax purposes. Currently, the Director of the Division of Taxation in the Department of the Treasury determines the withholding rate.
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97	97	This bill excludes New Jersey Lottery winnings in excess of $10,000 from gross income. Accordingly, all winnings from the New Jersey Lottery would be excluded from the gross income tax. As part of this exclusion, the bill also removes the New Jersey State Lottery's authority to withhold a percentage of such winnings for gross income tax purposes.