(TRENTON) – Legislation sponsored by Assembly Democrats John McKeon, Mila Jasey and Wayne DeAngelo to allow gross income tax deductions for contributions concerning the New Jersey Better Educational Savings Trust (NJBEST) Program cleared the Assembly Higher Education Committee on Monday.
The bill allows a taxpayer to deduct the amount of the taxpayer’s contribution to an account created under the NJBEST Program, New Jersey’s federally qualified tuition program, from the taxpayer’s gross income for the taxable year in which the contribution is made.
“College tuition costs are simply unmanageable for too many New Jersey residents,” said McKeon (D-Essex/Morris). “Providing a tax deduction through the NJBEST Program will help students and their families immensely; and could even be the extra funds needed for many to be able to make ends meet.”
The maximum deduction per taxpayer allowed under the bill for a taxable year is $5,000, or $2,500 for a married taxpayer filing separately.
“The tax deduction provided by this program can serve as an incentive to participate,” said Jasey (D-Essex/Morris). “It will also help taxpayers to meet the ever-increasing costs of higher education.”
A number of states currently offer special state tax benefits for the state’s own federally qualified tuition program. Of the states that offer special benefits, some offer a full tax deduction for the contributions and others place a limit on the amount of deduction.
“By investing in the NJBEST Program, this bill would allow students to receive money back from what they have paid into college tuition,” said DeAngelo (D-Mercer/Middlesex). “This money could then be used for the many other major costs of higher education such as books, room and board, and meal plans.”