New Jersey would exclude discrimination claimants' legal costs from income tax

New Jersey would leave covered lawyer fees and case costs out of a claimant's state taxable income. It covers informal claims, lawsuits, and agreements involving covered civil rights or workplace wrongdoing, including wage claims and retaliation for protected whistleblowing. A person may receive the fee money or have the fees and costs paid on their behalf. Only those fees and costs qualify, even if the person receives a larger settlement. It would apply to tax years starting on or after January 1 in the year after the bill becomes law.

New Jersey would exclude covered lawyer fees, case costs, and agreed payments to fellow whistleblowers from state taxable income. It covers awards under federal or New Jersey laws that let people sue on the government's behalf, or under similar laws. Payments to other whistleblowers must follow a sharing agreement. The excluded amounts must relate to an award recovered by the person claiming the exclusion. It would apply to tax years starting on or after January 1 in the year after the bill becomes law.