Local Income Tax Background

• In some states, local tax authorities impose a local income tax on residents' wages. Employers in these areas withhold local income taxes from their employees' pay, just as they do for federal and state income taxes. Residents of these areas may be required to file a local income tax return at the end of the year.
  
  

New Jersey Local Income Tax Policy

• The state of New Jersey does not have any counties or municipalities that impose a local income tax. Residents of New Jersey are not required to file local income tax returns, regardless of the county in which they live.
  
  

New Jersey State Income Tax

• While citizens of New Jersey do not have to pay a local income tax, they are subject to state income taxes. Workers generally have these payments withheld from their wages and earnings during the year. Depending on their income, they may have to report their total payments on Form NJ-1040 "New Jersey Resident Income Tax Return."
  
  

New Jersey County Taxes

• Counties in New Jersey impose other local taxes on citizens such as sales tax and property tax. Each county adds a certain amount of sales tax to the purchase amount of goods and services within its borders. Residents pay these taxes during their regular daily transactions. Counties also assess the value of a home or business owner's property and multiply it against a general tax rate to calculate each person's property tax. Property owners generally pay this tax once a year.