New Jersey Top Bracket (10.75%) 31 U.S.C. § 3124 Exempt 10.75% Tax Shelter

New Jersey T-Bills vs HYSA Calculator: State Tax Exemption & Net Yield

New Jersey taxes bank interest, certificates of deposit, and corporate bonds at ordinary income rates up to 10.75%. U.S. Treasury interest is fully shielded from New Jersey Gross Income Tax. Under 31 U.S.C. Section 3124, New Jersey residents are exempt from the state 10.75% top personal income tax on direct U.S. Treasury bill earnings.

Compare Other High-Tax States:

California (13.3%) New York City (14.8%) New York State (Outside NYC) (10.9%) Massachusetts (9.0%) New Jersey (10.8%)

Cash & Yield Inputs

Cash Balance $100,000

$10k $250k $500k $1M

U.S. T-Bill Nominal Yield 4.65%

Bank HYSA Advertised APY 4.25%

Federal Marginal Bracket

⚖️ Federal Preemption: 31 U.S.C. § 3124

Under federal law, states and municipalities are constitutionally barred from taxing interest earned on direct U.S. Treasury bills. In New Jersey, your effective state tax rate on T-Bills is exactly 0.00%.

Tax-Equivalent Yield (TEY) in New Jersey

5.21% Your bank HYSA must pay at least 5.21% APY to match a 4.65% T-Bill after paying New Jersey taxes.

Net Annual Cash Delta +$709 in pocket

State Tax Eliminated $457 saved/yr

Yield & Tax Deductions: Direct Comparison

Metric	U.S. Treasury Bill	Bank HYSA	Advantage
Gross Annual Yield	4.65%	4.25%	+0.40% T-Bill
New Jersey Tax Rate	0.00% (Exempt)	10.75%	T-Bill (-10.75% Tax)
Gross Annual Interest	$4,650	$4,250	+$400
State & Local Tax Owed	$0.00	-$457	+$457 saved
Net After-Tax Cash	$2,930	$2,221	+$709
Net After-Tax Yield	2.93%	2.22%	+0.71%
Liquidity & Safety	US Government Credit (No Cap)	FDIC Insured ($250k Cap/Bank)	T-Bill Unlimited Safety

Multi-Balance Cash Matrix (New Jersey)

Exact dollar amounts earned and tax saved across deposit tiers at current yields.

Deposit Balance	T-Bill Net Cash	Bank HYSA Net Cash	State Tax Lost	Net Cash Advantage
$25,000	$732	$555	$114	+$177
$50,000	$1,465	$1,110	$228	+$354
$100,000	$2,930	$2,221	$457	+$709
$250,000	$7,324	$5,552	$1,142	+$1,772
$500,000	$14,648	$11,103	$2,284	+$3,544
$1,000,000	$29,295	$22,206	$4,569	+$7,089

Automate Your Fixed Income Strategy

Deploy your cash into staggered maturities and compare against other low-risk cash structures.

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❓ Common Questions

Frequently Asked Questions: New Jersey T-Bills vs HYSA

Answers on state tax exemptions under 31 U.S.C. 3124 and Tax-Equivalent Yield math.

Is Treasury bill interest taxable under the New Jersey Gross Income Tax?

No, Treasury bill interest is excluded from New Jersey Gross Income Tax under 31 U.S.C. Section 3124 and New Jersey state tax regulations.

What is the New Jersey Tax-Equivalent Yield?

At a 10.75% state tax rate, nominal yield is divided by (1 minus 0.1075). A 4.65% T-Bill equals a 5.21% bank APY for top-bracket New Jersey residents.

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