The 2025 picture for New Jersey residents
In 2025, New Jersey residents paid federal ordinary income tax at brackets topping out at 37%, plus New Jersey state tax up to 10.75%, plus Medicare (1.45% + 0.9% additional above $200k single MAGI), plus a federal supplemental-withholding layer on RSU-style income.
2025 supplemental withholding
The federal 22% flat supplemental-withholding rate applied to RSU vests up to $$1,000,000 of year-to-date supplemental wages. Above that threshold, the rate stepped up to 37%. A senior tech earner in $New Jersey receiving $300k of base and $400k of RSU income $at 10.75% state tax typically under-withheld by tens of thousands and covered the gap through Q4 estimated payments or additional W-4 withholding.
Safe harbor in 2025
The safe-harbor rule in 2025 required paying either 90% of current-year tax or 110% of prior-year tax (for AGI above $150k) to avoid underpayment penalties under IRC §6654. Many equity earners in New Jersey relied on the 110%-of-prior-year route because current-year tax was hard to estimate before the Q4 vest.
Frequently asked
- What supplemental-wage withholding rate applied to RSU income in New Jersey in 2025?
- The federal supplemental-wage withholding rate was 22% on the first $1,000,000 of supplemental wages per calendar year, rising to 37% above that. New Jersey state withholding ran up to 10.75% at the top bracket.
- Did New Jersey recognize federal QSBS exclusion in 2025?
- New Jersey's conformity status varies year by year and by type of taxpayer. As of 2025, most states other than California, New Jersey, Pennsylvania, and Mississippi either conformed fully or partially to Section 1202. Check the 2025 filing instructions for the specific language.
- What was the top federal ordinary bracket in 2025, and how did it apply to New Jersey residents?
- The 37% federal ordinary bracket started around $626,350 of taxable income for single filers in 2025. New Jersey stacked 10.75% on top of that for high earners, producing a combined top marginal rate of approximately 47.8%.