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Taxpayers are advised that the New Jersey Division of Taxation has raised the 2022 interest rate on unpaid tax balances from 6.25% to 7.75%.

The higher 7.75% interest rate applies to outstanding balances during the period from July 1 to Dec. 31. The move is the first change to the interest rate for unpaid balances in more than two years.

The change resulted from an increase in the prime rate by commercial banks after the Federal Reserve, the nation’s central bank, raised interest rates last month. Under state law, interest assessed on outstanding state tax balances is calculated as the Federal Reserve Prime Rate plus 3%.

The Federal Reserve raised the prime rate to 4.75% on June 15.

For more information, see the Division of Taxation’s technical bulletin here.