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The New Jersey Legislature’s Office of Legislative Services has clarified that the state’s new family leave law isn’t to be funded with taxes on retirees’ pension payments.

New Jersey employees fund the new Paid Family Leave Insurance program through payroll deductions of 0.09% of their pay, up to a total of $26.01 per year. However, it wasn’t clear until now whether pension payments were subject to the same tax.

Assemblyman Samuel D. Thompson asked the Office of Legislative Services to clarify the matter. Only payments for services—wages and salaries—are subject to the new tax.

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