No Tax on Tips Calculator for New Jersey (2026)
Calculate how much New Jersey workers save now that tips are exempt from federal income tax under the OBBBA.
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Your Annual Tax Savings in New Jersey
Tips Tax Exemption in New Jersey
Under the One Big Beautiful Bill Act (OBBBA), workers in New Jersey who earn tips can deduct 100% of their tip income from federal income tax for tax years 2025 through 2028.
New Jersey Minimum Wage for Tipped Workers
The minimum wage in New Jersey is $15.49/hour. Tipped workers may be paid a lower base wage of $5.62/hour, with tips expected to make up the difference. This makes the federal tip tax exemption especially valuable for New Jersey workers.
Top Tipped Industries in New Jersey
- Restaurant servers
- Bartenders
- Casino dealers
- Hotel staff
Does New Jersey Tax Tips? (State Conformity)
State Income Tax Applies to Tips
New Jersey has a state income tax rate of 10.8%. While the OBBBA exempts tips from federal income tax, New Jersey may still tax tip income at the state level. Check with a local tax professional for details.
How the No Tax on Tips Law Works
What Qualifies
- Cash tips received directly from customers
- Credit/debit card tips
- Tips from tip pools or tip sharing
- Service charges distributed as tips
What Doesn't Change
- FICA taxes still apply: You still pay 6.2% Social Security + 1.45% Medicare on tip income
- Tips must still be reported: Report all tips to your employer and on your tax return
- Annual cap: Deduction limited to $25,000 per year in tip income
- Income limit: The exemption applies to workers earning less than $150,000/year (single) or $300,000 (married filing jointly)
Federal Calculators
Compare with the federal-level tools: Tip Tax Savings (Federal) | Overtime Tax Savings (Federal)