New Jersey tips tax calculator and 2027 tipped wage

New Jersey’s Division of Taxation says the federal tips deduction does not affect the NJ-1040, and on January 1, 2027 the cash wage for tipped workers rises to $6.61 as the minimum reaches $16.48.

Your New Jersey tips

State where you work Qualified tips this year

Voluntary cash and card tips on your W-2, 1099 or Form 4137 — not service charges.

Tax year

2025202620272028

Filing status Other income in your AGI

Wages without the tips, plus any other income (both spouses if filing jointly).

Your occupation The 71 Treasury Tipped Occupation Codes in the final rule (TD 10044).

How you are paid

Employee (W-2) Self-employed (1099)

More options

Itemized deductions (if larger than the standard deduction)

State marginal rate override (%) Leave blank to use the state’s published rate for your bracket.

Federal income tax saved in 2026Deduction $18,000 at 12% $2,160

$18,000 of the $25,000 cap used (72%)

Qualified tips	$18,000
After the $25,000 cap	$18,000
Income phase-out (MAGI $48,000)	$0
Tips deduction	$18,000
Federal tax before → after	$3,580 → $1,420
Social Security & Medicare still due on tips	$1,377
New Jersey 2026: Tips stay taxable in this state	$0
Total income tax saved	$2,160

What the estimate leaves out

Why no federal deduction reaches New Jersey

The Gross Income Tax is built from defined categories of income, not from federal AGI, so “federal deductions under the federal OBBBA regarding overtime, tips, and senior citizens do not affect” New Jersey returns. Tips remain wages on the NJ-1040 for 2025 and 2026.

New Jersey figures

Most employers	$6.05 / $15.92
Seasonal employers and employers with fewer than 6 employees	$6.05 / $15.23
In force	July 1, 2026 – December 31, 2026
Next change	January 1, 2027: $6.61 / $16.48; $6.61 / $16.25
Tipped threshold	More than $30 a month in tips
Tips on the 2025 return	tips stay taxable in this state. Division of Taxation: federal OBBBA deductions for tips “do not affect a taxpayer’s New Jersey Individual Income Tax return.” Source: New Jersey Division of Taxation
Tips on the 2026 return	tips stay taxable in this state. Unchanged; we found no enacted New Jersey tips exclusion. Source: New Jersey Division of Taxation

The 2027 chart and the notice rule

The Department of Labor’s chart (MW-570, 9/26) sets $16.48 for most employers, $16.25 for seasonal employers and those with fewer than six employees, $15.00 for agricultural employers, $19.48 for long-term-care direct-care staff, and a $6.61 cash wage for tipped workers. An employer may take the tip credit only after telling tipped workers in advance the cash wage, the credit claimed and that they keep their tips apart from a valid pool among tipped staff; the state’s gratuity regulations also govern tip records and splitting.

An Atlantic City server

A $23,000 federal deduction saves $2,760; New Jersey taxes the tips as wages. At the 2026 cash wage of $6.05, 32 hours pay $194; with $150 of tips the employer owes $166 to reach $509.

Check a New Jersey workweek

State Workweek date

Employer type or region

Hours worked this week Tips kept this week

Hourly cash wage you were paid

Leave blank to assume the legal minimum cash wage.

Employer make-up owed$6.05 cash wage + tips must reach $15.92 an hour. $166

Minimum for the hours	$509
Cash wage paid	$194
Tips counted toward the minimum	$150
Your effective hourly pay	$15.92

How the make-up rule works

Where these figures come from

Federal rules: how the deduction works. Nearby: New York, Pennsylvania, Delaware.

Figures verified against primary sources on October 5, 2026