TRENTON, NJ  – New Jersey is no longer the only state that taxed combat pay for members of the military under a new law signed on Monday by Governor Phil Murphy.   The law now excludes combat pay from gross taxable income under the New Jersey income tax. 

The federal government does not tax the combat pay income either.

“Members of the military put everything on the line for our state and our country,” said Murphy. “I am happy and proud that, even in the midst of our state’s most serious fiscal crisis, we were able to find a way to make life easier for our troops and provide some long-overdue relief to the bravest among us.”

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“All distractions when deployed reduce combat effectiveness. This is a positive action that will pay dividends for our women and men in combat,” said Maj. Gen. Jemal J. Beale, The Adjutant General of New Jersey and Commissioner of the New Jersey Department of Military and Veterans Affairs.

The new law excludes military pay for service in a combat zone, or for hospitalization as the result of an injury while serving in a combat zone, from gross taxable income under the New Jersey income tax. The law excludes combat pay in the same manner as federal taxation does.

A combat zone is defined as any area the President of the United States designates by Executive Order as an area in which the U.S. Armed Forces are engaging or have engaged in combat.

“Every year, New Jersey residents are deployed to countries throughout the world to fight on behalf of America. Those military members serving in combat zones risk their lives in defense of our country,” said Assemblyman Wayne DeAngelo (D-Mercer/Middlesex) who was a sponsor of the legislation. “It is only right we honor their courage and sacrifice by exempting the pay they earn during that time period as well as any time spent in a hospital for injuries sustained in combat from state income taxes. Here in New Jersey, we value the service of our military members and veterans.”

“I am proud today of Gov. Murphy and the State of New Jersey for adopting the combat zone state tax exemption. It must have been a difficult decision to make in challenging financial times,” said Lt. Col. Peter Lupo, Vice President of Legislative Affairs, New Jersey Veterans Chamber of Commerce. "For that reason, New Jersey soldiers will be deeply appreciative. I can personally attest to that.”