A new analysis by the Tax Foundation finds that the One Big Beautiful Bill Act (OBBBA) signed in July by President Donald Trump will save individual New Jersey taxpayers an average $3,702 in federal taxes in 2026, about $50 less than the national average.
All states will see a reduction in federal taxes on average for individual taxpayers, but some fare better than others, according to independent research think tank’s analysis. Taxpayers in Wyoming ($5,375), Washington ($5,372), and Massachusetts ($5,139) will see the largest average tax cuts in 2026, while taxpayers in West Virginia ($2,503) and Mississippi ($2,401) will see the smallest average tax cuts that year.
OBBBA makes permanent the temporary individual tax changes first put in place by the 2017 Tax Cuts and Jobs Act (TCJA), thereby avoiding a tax hike on an estimated 62% of filers in 2026 if the TCJA had expired as scheduled.
Additionally, OBBBA provides tax cuts to individuals and business on top of the TCJA extensions including new deductions for tipped and overtime income, an expanded child tax credit and standard deduction and permanence for 100% bonus depreciation and domestic research and development (R&D) expensing.
Tax Foundation estimates OBBBA’s business tax cuts, workforce development funding, and other incentives meant to stimulate hiring will create about 938,000 full-time equivalent jobs nationwide over the long run. Job creation numbers by state range from more than 132,000 jobs in California and 81,000 jobs in Texas to only about 1,700 new jobs in Vermont. In New Jersey, the foundation estimates 33,093 new jobs will be created.
The $3,752 average tax cut per taxpayer nationwide in 2026 falls to $2,505 in 2030 as certain individual changes like deductions for tips and overtime expire. However, the savings rises to $3,301 in 2035 as inflation increases wages and the nominal value of permanent tax cuts. In New Jersey, the $3,702 average tax cut per taxpayer in 2026 drops to $2,238 in 2030 before increasing to $3,036 in 2035, the Tax Foundation said.
