New Jersey would exclude certain lawyer fees and costs from taxable income

New Jersey would leave related lawyer fees and costs out of a claimant’s taxable income. It covers informal claims, lawsuits, and agreements involving unlawful acts under civil rights or workplace law. The claimant may receive the money or have someone else pay the fees and costs for them. This exclusion would not cover other money from an award or settlement. If enacted, it would take effect immediately and apply to tax years beginning on or after January 1 of the year after enactment.

New Jersey would exclude related lawyer fees, costs, and certain payments to other whistleblowers from a taxpayer’s taxable income. It covers awards under federal or New Jersey false claims laws, or similar cases where a private person sues on the government’s behalf. The taxpayer must recover an award. Payments to other whistleblowers must be made under a sharing agreement. If enacted, it would take effect immediately and apply to tax years beginning on or after January 1 of the year after enactment.