Executive Summary
New Jersey’s FY2027 budget package includes several tax and fee changes that may affect 2026 estimated payments, employer compliance obligations, individual income tax planning, and data broker registration fees. Clients should review exposure now, particularly when provisions apply retroactively or create new near-term filing and payment deadlines as noted below.
Most affected taxpayers: corporations with New Jersey NOLs, pass-through business owners, employers with Medicaid-enrolled employees or dependents, businesses handling New Jersey consumer data, and families with young children.
Client takeaway
The budget changes are broad, but the immediate priorities are to update 2026 estimates, model cash-tax and provision impacts, identify any new employer or data broker filings, and revisit individual planning around income thresholds.
Key Changes
- Corporate NOL cap: AB 5322 temporarily caps Corporation Business Tax NOL deductions at $1 million per year for privilege periods ending on or after July 31, 2026, and before July 31, 2030. Disallowed NOLs may be used for a privilege period ending on or after July 31, 2030, but before July 31, 2032. However, NOLs may not reduce the taxpayer’s allocated entire net income by more than 75% during that period.
- Alternative business calculation limitation: Effective retroactively for 2026, AB 5323 reduces the alternative business calculation adjustment from 50% to 25% for taxpayers with gross income over $500,000 through $1 million and eliminates the adjustment for taxpayers with gross income over $1 million.
- Employer Medicaid assessment: AB 5324 creates an annual fee for employers with at least 50 Medicaid-enrolled employees, commencing with electronic filing and payment due April 15, 2027.
- Child tax credit increase: SB 4531 / AB 5329 temporarily increases the New Jersey child tax credit for children under 6 by 25% for tax years 2026 through 2028 for income levels up to $80,000.
- Data broker registration fee: AB 5328 requires annual registration effective March 27, 2027, for certain data brokers and data collectors doing business in New Jersey. The fees are tied to the number of New Jersey consumers whose data is sold or licensed (“units”) and range from $5,000 for up to 100,000 units to $1.5 million for over 4.5 million units.
Please contact your SAX Advisory Group engagement team before year-end to assess and plan for the potential impact of New Jersey’s fiscal year 2027 budget provisions on your personal income and/or business taxes and fees.
Disclaimer
This alert is provided by SAX Advisory Group for general informational purposes only and reflects legislation enacted as of June 30, 2026. It is not legal, accounting, or tax advice. Please consult your SAX Advisory Group advisor before taking action based on this information.