New Jersey Administrative Code
Title 18 - TREASURY - TAXATION
Chapter 35 - NEW JERSEY GROSS INCOME TAX
Subchapter 7 - WITHHOLDING AND REPORTING OF TAX
Section 18:35-7.5 - Summer payment plan

(a) Certain deferred payments, authorized under a so-called summer payment plan under 18A:29-3, whereby an amount equal to 10 percent of the employee's salary is withheld and paid to the participant in the plan at a later date are subject to gross income tax under 54A:1-1 et seq., at the time withheld and not at the time paid, provided that a similar treatment is given under the Internal Revenue Code and regulations thereunder for Federal income tax purposes, subject to the following exception: if such similar treatment under Federal law is disallowed due to the civil union status of the employee, the employee shall nevertheless be allowed to receive the same State tax treatment as if the taxpayer were married.

(b) 54A:8-3 provides that a taxpayer's accounting method for gross income tax purposes shall be the same as his or her accounting method for Federal income tax purposes. Therefore, if for Federal income tax purposes, an employee who participates in a summer payment plan is deemed to have received the salary at the time that the salary was withheld and placed into a deferred salary escrow fund, such income will also be deemed to have been received and subject to tax for New Jersey gross income tax purposes at that time. Such salary would not then be subject to New Jersey gross income tax when the employee receives a payment from the deferred salary escrow fund.