What is New Jersey's income tax rate for self-employed workers in 2026?

Progressive rates from 1.4% up to 10.75%. Most gig workers with $40,000–$100,000 of profit fall in the 5.525%–6.37% brackets.

Does New Jersey allow the QBI deduction?

No. New Jersey does not conform to the federal 20% qualified business income deduction, so your NJ taxable income is higher than your federal.

Can I deduct SEP-IRA contributions on my NJ-1040?

No — New Jersey does not allow deductions for SEP-IRA, SIMPLE or most self-employed retirement contributions. This surprises many first-year freelancers.

When are New Jersey quarterly estimated taxes due?

NJ-1040-ES payments follow the federal calendar: April 15, June 15, September 15, 2026 and January 15, 2027, required if you expect to owe more than $400 of NJ tax.

Do New Jersey cities charge local income tax?

No. Unlike Pennsylvania or Michigan, no New Jersey municipality levies an income tax — the NJ-1040 is your only income tax return.

How much should a New Jersey gig worker set aside for taxes?

Around 30% to 35% of net profit typically covers federal income tax, the 15.3% self-employment tax and New Jersey's state rate.

New Jersey Self-Employed Tax Calculator

Federal income tax + 15.3% SE tax + New Jersey's progressive state tax on 2026 1099 income — with NJ's non-conformity rules built in.

New Jersey's graduated rates run from 1.4% to 10.75%, and most gig workers land in the 5.525%–6.37% range. The real trap is non-conformity: New Jersey doesn't allow the 20% QBI deduction, doesn't let you deduct SEP-IRA contributions, and won't let a business loss offset your other income. Your New Jersey taxable income is almost always higher than your federal — budget for it.

Self-employed income & expenses

Estimate federal + SE + state tax for the 2026 tax year in one pass.

Annual 1099 income

Business miles driven

Other business expenses

Self-employed health insurance

Retirement contributions (SEP / Solo 401k)

W-2 income (if any)

Federal tax withheld

Filing status

State

Estimated total tax bill

$12,988

Refund / owed

-$12,988

Effective rate

21.6%

Detailed breakdown

Mileage deduction$5,600

Total business expenses$8,100

Net self-employment income$51,900

Self-employment tax (15.3%)$7,333

½ SE deduction (above-the-line)$3,667

Adjusted gross income$48,233

Taxable income$32,133

Federal income tax$3,608

State tax (est.)$2,047

Quarterly estimated payment$3,056

Marginal rate18.4%

New Jersey city tax rates for self-employed workers (2026)

New Jersey runs a progressive income tax topping out at 10.75% for high earners, and it famously does NOT conform to federal rules: no QBI deduction, no deduction for SEP-IRA contributions, and business losses cannot offset other income. Most gig workers land in the 5.525%–6.37% brackets.

Local and state tax rates for self-employed residents of major New Jersey cities in 2026
City	Local rate	State rate	What gig workers should know
Newark (Essex)	No city income tax	Up to 10.75%	State handles everything; no municipal returns to file.
Jersey City (Hudson)	No city income tax	Up to 10.75%	No local income tax, but a 1% payroll tax applies to employers, not 1099 contractors.
Paterson (Passaic)	No city income tax	Up to 10.75%	Gig workers file only the NJ-1040.
Elizabeth (Union)	No city income tax	Up to 10.75%	No local filing; quarterly estimates go to the state.
Trenton (Mercer)	No city income tax	Up to 10.75%	Businesses may need a local mercantile license; no income tax.

New Jersey local and state filing deadlines

Q1 NJ-1040-ESApril 15, 2026
Required if you expect to owe more than $400 of NJ tax after credits and withholding.
Q2 NJ-1040-ESJune 15, 2026
Second state installment.
Q3 NJ-1040-ESSeptember 15, 2026
Third installment.
Q4 NJ-1040-ESJanuary 15, 2027
Final installment for the 2026 year.
NJ-1040 resident returnApril 15, 2027
New Jersey grants an automatic 6-month extension to file with Form NJ-630, but payment is still due April 15.
Q1 federal 1040-ESApril 15, 2026
Covers income earned January 1 – March 31.
Q2 federal 1040-ESJune 15, 2026
Covers April 1 – May 31.
Q3 federal 1040-ESSeptember 15, 2026
Covers June 1 – August 31.
Q4 federal 1040-ESJanuary 15, 2027
Covers September 1 – December 31.

New Jersey is NOT a rolling-conformity state: the 20% QBI deduction, SEP-IRA deductions, and several federal write-offs do not exist on the NJ-1040 — your NJ gross income is often higher than federal.
Business losses on NJ Schedule NJ-BUS-1 cannot offset wages or other income; they only carry forward against future business income.
Working across the river? NJ and PA have a reciprocity agreement, but NY does not — NJ residents gigging in NYC still owe NJ tax on all income with a credit for NY tax paid.

See every New Jersey tax form you need to file — annual, quarterly, and local →

Frequently asked questions

What is New Jersey's income tax rate for self-employed workers in 2026?: Progressive rates from 1.4% up to 10.75%. Most gig workers with $40,000–$100,000 of profit fall in the 5.525%–6.37% brackets.
Does New Jersey allow the QBI deduction?: No. New Jersey does not conform to the federal 20% qualified business income deduction, so your NJ taxable income is higher than your federal.
Can I deduct SEP-IRA contributions on my NJ-1040?: No — New Jersey does not allow deductions for SEP-IRA, SIMPLE or most self-employed retirement contributions. This surprises many first-year freelancers.
When are New Jersey quarterly estimated taxes due?: NJ-1040-ES payments follow the federal calendar: April 15, June 15, September 15, 2026 and January 15, 2027, required if you expect to owe more than $400 of NJ tax.
Do New Jersey cities charge local income tax?: No. Unlike Pennsylvania or Michigan, no New Jersey municipality levies an income tax — the NJ-1040 is your only income tax return.
How much should a New Jersey gig worker set aside for taxes?: Around 30% to 35% of net profit typically covers federal income tax, the 15.3% self-employment tax and New Jersey's state rate.