N.J. Stat. tit. 54A, ch. 7

in effect

N.J. Stat. § 54A:7-1 Requirement of withholding tax from wages.

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. Amended 1987, c.76, s.57; 2006, c.85, s.1; 2009, c.69, s.4.

N.J. Stat. § 54A:7-1.1 Voluntary withholding from pensions and annuities

Voluntary withholding from pensions and annuities. a. Every payor of a pension or annuity, under an annuity, endowment or life insurance contract, or payments of any such amounts which are received as pension disability or retirement benefits, to a taxpayer under any public or private plan, shall withhold the amount specified by the recipient of a pension or annuity. b. The amount to be withheld shall be a minimum of $10.00 per payment period or an even dollar amount greater than the minimum as specified by the recipient of the pension or annuity. c. The recipient of a pension or annuity shall make a request in writing to the payor for the amount to be withheld on a form and in the manner specified by the director. The amount being withheld may be changed or terminated upon request by the recipient of the pension or annuity in the same manner. d. The director shall promulgate the regulations necessary to implement voluntary withholding from pensions and annuities. L.1989, c.328, s.1.

N.J. Stat. § 54A:7-1.2 Entities making payments to unincorporated contractors, 7 percent withholding; exceptions; definitions.

2. a. A person, other than a governmental entity, homeowner, or tenant, maintaining an office or transacting business in this State and making a payment of compensation or remuneration for services rendered in this State to a resident unincorporated contractor or nonresident unincorporated contractor shall deduct and withhold from the payment a tax equal to 7 percent of the amount paid, except as otherwise provided by this section. b. A person that obtains from its unincorporated contractor proof of the contractor's registration with the Division of Revenue in the Department of the Treasury shall not be required to withhold pursuant to subsection a. of this section. The types of proof required and the length of the retention period of the proofs shall be as prescribed by the Director of the Division of Taxation. c. Withholding pursuant to subsection a. of this section shall not be required for payments for which withholding is required pursuant to N.J.S.54A:7-1 or such other payments as the director may prescribe by regulation. d. A person required to deduct and withhold tax from a payment under subsection a. of this section shall furnish to each unincorporated contractor an annual written statement reflecting the total of all payments made and tax withheld in a calendar year on or before February 15 following the close of that calendar year in the form prescribed by the director. e. Payments to an unincorporated contractor for which withholding is required by subsection a. of this section shall be taxable or subject to employer withholding under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., as if no withholding were required by this section, but any amount actually deducted and withheld under this section in any calendar year shall be deemed to have been paid to the director on behalf of the unincorporated contractor from whom withheld, and the contractor shall be credited with having paid that amount for the taxable year beginning in such calendar year. A person required to deduct and withhold tax under subsection a. of this section shall, for each calendar month, on or before the 15th day of the month following the close of the calendar month, file a return as prescribed by the director and pay over to the director or to a depository designated by the director the amounts required to be deducted and withheld. The director may, if the director believes such action necessary for the protection of the revenues, require a person to make a return and pay to the director the amounts deducted and withheld at any time, or from time to time. The director may, by regulation, require the filing of withholding returns and the payment of withheld amounts on a semimonthly or more frequent basis or require the filing of returns on a quarterly basis, with payments of the amounts withheld on a monthly or more frequent basis, if the director deems such action in the best interest of the State. Any reconciliation of withholding shall be filed on or before February 15 following the close of the calendar year in accordance with rules and regulations prescribed by the director. f. If a person required to deduct and withhold tax under subsection a. of this section fails to collect, truthfully account for, pay over the withholding, or make returns of the withholding as required in this section, the director may serve a notice requiring such person to withhold the amounts that become withholdable after service of such notice, to deposit such withholdings in a bank approved by the director in a separate account, in trust for and payable to the State of New Jersey and keep the amount of such withholdings in such account until payment over to the director. Such notice shall remain in effect until a notice of cancellation is served by the director. g. (1) A person required to deduct and withhold tax under subsection a. of this section is hereby made liable for such withholding, except as that person may be excused from that withholding pursuant to subsection b. of this section. (2) The owner or lessor of the real property to which construction, improvement, alteration, or repair of a building, structure, or improvement shall be made, required to deduct and withhold tax under subsection a. of this section for a contractor with whom the owner or lessor is in direct privity of contract and who is liable pursuant to paragraph (1) of this subsection for such withholding, is hereby also made liable for that contractor's withholding from a subcontractor, or the subcontractor's withholding from a lower tier subcontractor on that contract, except as the contractor, subcontractor or lower tier subcontractor may be excused from that withholding pursuant to subsection b. of this section. (3) For purposes of assessment and collection, any tax required to be withheld and paid over to the director and any additions to tax, penalties and interest with respect to that tax shall be considered the tax of that person required to deduct and withhold. Any amount actually withheld under this section shall be held to be a special fund in trust for the director. No unincorporated contractor shall have any right of action against a person required to deduct and withhold an amount of a payment in respect to any moneys deducted and withheld and paid over to the director in compliance or in intended compliance with this section. h. If a person required to withhold under subsection a. of this section fails to deduct and withhold tax as required, and thereafter the tax against which the tax may be credited is paid, the tax required to be deducted and withheld shall not be collected from the person required to withhold under subsection a. of this section, provided however that the person required to withhold under subsection a. of this section shall not be relieved from liability for any additions to tax, penalties and interest with respect to that tax otherwise applicable in respect of that failure to deduct and withhold. i. For the purposes of this section: "Contractor" means a person entering into a contract for services to construct, improve, alter, or repair a building, structure, or improvement to real property and includes a subcontractor, but shall not include professional services as defined in section 1 of P.L.1960, c.40 (C.17:16C-1 ); "Governmental entity" means: the State of New Jersey, or any of its agencies, instrumentalities, public authorities, political subdivisions or public corporations, including a public corporation created pursuant to agreement or compact with another state; the United States of America and any of its agencies and instrumentalities; and the United Nations or any international organization of which the United States of America is a member; "Homeowner" means an individual who makes a payment to a contractor to construct, improve, alter, or repair a dwelling which the individual owns and in which the individual resides or will reside; "Subcontractor" means a person entering into a contract with a contractor for services to construct, improve, alter, or repair a building, structure, or improvement to real property, but shall not include professional services as defined in section 1 of P.L.1960, c.40 (C.17:16C-1 ); "Tenant" means an individual who makes a payment to a contractor to construct, improve, alter, or repair a dwelling unit which the individual rents or leases and in which the individual resides or will reside; and "Unincorporated contractor" means an individual contractor or a contractor organized as a sole proprietorship, a partnership, or any other business form not taxable as a corporation for federal tax purposes. L.2006, c.85, s.2.

N.J. Stat. § 54A:7-2 Information statement for employee or recipient of other payments, earned income credit.

54A:7-2. a. Every employer or payor of a pension or annuity required to deduct and withhold tax under this act from the wages of an employee or from the payment of a pension or annuity, or an employer who would have been required so to deduct and withhold tax if an employee had claimed no more than one withholding exemption, shall furnish to each such employee, or pension or annuity recipient or the estate thereof, in respect of the wages or pension or annuity payments paid by such employer or payor to such employee or pension or annuity recipient during the calendar year on or before February 15 of the succeeding year, or, if his employment or pension or annuity is terminated before the close of such calendar year, within 30 days from the date on which the last payment of the wages or pension or annuity is made, a written statement as prescribed by the director showing the amount of wages or pension or annuity payments paid by the employer or payor to the employee or pension or annuity recipient, the cost of commuter transportation benefits, as defined pursuant to section 3 of P.L.1992, c.32 (C.27:26A-3), excludable by the employee pursuant to section 1 of P.L.1993, c.108 (C.54A:6-23), and the cost of such benefits not so excludable, provided by the employer to the employee, the amount deducted and withheld as tax, the amount deducted and withheld as worker contributions for unemployment and disability insurance as provided under the New Jersey "Unemployment Compensation Law," and such other information as the director shall prescribe. b. In addition to the statement furnished pursuant to subsection a. of this section, each employer shall notify an employee in writing of the availability of the earned income tax credit under the provisions of section 32 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.32, and the New Jersey earned income tax credit provided in section 2 of P.L.2000, c.80 (C.54A:4-7). The written notification shall use the statement developed by the State Treasurer pursuant to section 4 of P.L.2005, c.210 (C.52:18-11.3) for this purpose. The employer shall notify only those employees whom the employer knows, or reasonably believes, may be eligible for the federal credit based on the wages reported on the statement distributed pursuant to subsection a. of this section. L.1976, c.47, s.54A:7-2; amended 1981, c.453, s.1; 1989, c.328, s.2; 1993, c.108, s.2; 2005, c.210, s.5.

N.J. Stat. § 54A:7-3 Credit for tax withheld

54A:7-3. Credit for tax withheld. Wages or pensions or annuities upon which tax is required to be withheld shall be taxable under this act as if no withholding were required, but any amount of tax actually deducted and withheld under this act in any calendar year shall be deemed to have been paid to the director on behalf of the person from whom withheld, and such person shall be credited with having paid that amount of tax for the taxable year beginning in such calendar year. For a taxable year of less than 12 months the credit shall be made under regulations of the director. L.1976, c.47, s.54A:7-3; amended 1989,c.328,s.3.

N.J. Stat. § 54A:7-4 Employer's or other payor's return and payment of withheld taxes

54A:7-4. Employer's or other payor's return and payment of withheld taxes. (a) General. -- Every employer or payor of a pension or annuity required to deduct and withhold tax under this act shall, for each calendar month, on or before the 15th day of the month following the close of such calendar month, file a withholding return as prescribed by the director and pay over to the director or to a depository designated by the director the taxes so required to be deducted and withheld. Any return due with respect to the last quarter of a calendar year shall be filed and the amount of the withholding shall be paid on or before January 31 next following. The director may, if the director believes such action necessary for the protection of the revenues, require any employer or payor of a pension or annuity to make such return and pay to the director the tax deducted and withheld at any time, or from time to time. Where the amount of wages paid by an employer is not sufficient under this act to require the withholding of tax from the wages of any of that employer's employees, the director may, by regulation, permit such employer to file an annual return on or before February 28 of the following calendar year. The director may, by regulation, require the filing and payment of withholding returns and taxes on a semimonthly or more frequent basis or require the filing of returns on a quarterly basis, with payments of the taxes withheld on a monthly or more frequent basis, if the director deems such action in the best interest of the State. (b) Deposit in trust for director. --Whenever any employer or payor of a pension or annuity fails to collect, truthfully account for, pay over the tax, or make returns of the tax as required in this section, the director may serve a notice requiring such employer or payor to collect the taxes which become collectible after service of such notice, to deposit such taxes in a bank approved by the director in a separate account, in trust for and payable to the State of New Jersey and keep the amount of such tax in such account until payment over to the director. Such notice shall remain in effect until a notice of cancellation is served by the director. L.1976, c.47, s.54A:7-4; amended 1978,c.43; 1989,c.328,s.4; 1995,c.160,s.1.

N.J. Stat. § 54A:7-5 Liability for withheld taxes

54A:7-5. Liability for withheld taxes. Every employer or payor of pension or annuity required to deduct and withhold tax under this act is hereby made liable for such tax. For purposes of assessment and collection, any amount required to be withheld and paid over to the director, and any additions to tax, penalties and interest with respect thereto, shall be considered the tax of the employer or payor. Any amount of tax actually deducted and withheld under this act shall be held to be a special fund in trust for the director. No employee or pension or annuity recipient shall have any right of action against an employer or payor of a pension or annuity in respect to any moneys deducted and withheld from the wages or pension or annuity and paid over to the director in compliance or in intended compliance with this act. L.1976, c.47, s.54A:7-5; amended 1989,c.328,s.5.

N.J. Stat. § 54A:7-6 Failure to withhold

54A:7-6. Failure to withhold. If an employer or payor of a pension or annuity fails to deduct and withhold tax as required, and thereafter the tax against which such tax may be credited is paid, the tax so required to be deducted and withheld shall not be collected from the employer or payor, but the employer or payor shall not be relieved from liability for any penalties, interest, or additions to the tax otherwise applicable in respect of such failure to deduct and withhold. L.1976, c.47, s.54A:7-6; amended 1989,c.328,s.6.

N.J. Stat. § 54A:7-7 Filing annual reconciliation of tax withheld

54A:7-7. Filing annual reconciliation of tax withheld. Any reconciliation of tax withheld shall be filed by the employer or payor of a pension or annuity with the Division of Taxation on or before February 15 following the close of the calendar year in accordance with rules and regulations prescribed by the director. L.1976, c.47, s.54A:7-7; amended 1989,c.328,s.7.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026