Certain items of income are not subject to New Jersey tax and should not be included when you file a New Jersey return. Below is a partial list of such items.
The following items of income are not subject to New Jersey tax. However, if you file a resident return, you must report the total amount of nontaxable interest on the "Tax exempt interest" Line of your return:
For more information on exempt (nontaxable) income, see the section on income in the tax return instructions.
More information about exempt obligations is available in Tax Topic Bulletin GIT-5, Exempt Obligations.