Bill Text: NJ A1114 | 2024-2025 | Regular Session | Introduced
Bill Title: Increases gross income tax deduction for contributions to the New Jersey Better Educational Savings Trust (NJBEST) Program.
Spectrum: Partisan Bill (Republican 8-0)
Status: (Introduced) 2024-01-09 - Introduced, Referred to Assembly Higher Education Committee [A1114 Detail]
Download: New_Jersey-2024-A1114-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblyman JOHN DIMAIO
District 23 (Hunterdon, Somerset and Warren)
Assemblywoman AURA K. DUNN
District 25 (Morris and Passaic)
Co-Sponsored by:
Assemblymen S.Kean, Clifton, McGuckin, Assemblywoman N.Munoz, Assemblyman Peterson, Assemblywoman Matsikoudis and Assemblyman Torrissi
SYNOPSIS
Increases gross income tax deduction for contributions to the New Jersey Better Educational Savings Trust (NJBEST) Program.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act increasing the gross income tax deduction for contributions to the New Jersey Better Educational Savings Trust (NJBEST) Program, and amending P.L.1997, c.237.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.2021, c.128 (C.54A:3-12) is amended to read as follows:
3. [A] a. Except as otherwise provided in this section, a taxpayer with gross income of $200,000 or less shall be allowed a deduction, not to exceed [$10,000] $15,000, from the taxpayer's gross income for the taxable year in the amount of the taxpayer's contribution for the taxable year to an account established pursuant to the "New Jersey Better Educational Savings Trust Program," (N.J.S.18A:71B-35 et seq.).
b. For the second taxable year beginning after the enactment of P.L. , c. (pending before the Legislature as this bill), and continuing annually thereafter, the director shall annually recompute the maximum allowable deduction and each income limitation set forth in subsection a. of this section by multiplying the maximum allowable deduction and the income limitations by the cost-of-living adjustment. Notwithstanding the maximum allowable deduction and the income limitations provided in subsection a. of this section, each taxpayer shall use the adjusted amounts as computed by the director for the applicable taxable year. The director shall round the recomputed maximum allowable deduction and the income limitation amounts to the next highest multiple of $10.
c. For purposes of this section, "cost-of-living adjustment" means the factor calculated by dividing the consumer price index for all urban consumers for the nation, as prepared by the United States Department of Labor as of the close of the 12-month period ending on August 31 of the calendar year prior to the calendar year in which the taxable year begins, by that index as of the close of the 12-month period ending on August 31 of the calendar year preceding the calendar year in which P.L. , c. (pending before the Legislature as this bill) takes effect.
(cf: P.L.2021, c.128, s.3)
2. This act shall take
effect immediately and shall apply to contributions made for taxable years
beginning on or after January 1 next following the date of enactment.
STATEMENT
This bill increases the gross income tax deduction, initially up to $15,000 per taxable year, for contributions made by the taxpayer to the New Jersey Better Educational Savings Trust (NJBEST) Program, (N.J.S.18A:71B-35 et seq.).
Under current law, a taxpayer with gross income of less than $200,000 can deduct up to $10,000 for contributions to the NJBEST program. The bill increases the deduction amount to up to $15,000 for the first taxable year following enactment.
The bill also provides for annual cost-of-living adjustments to the maximum deduction and to the income limits ("COLA adjustment") for future taxable years; the COLA adjustment amount is the national consumer price index for all urban consumers as prepared by the United States Department of Labor.
This bill affords New Jersey taxpayers with tax relief while promoting personal investment in, and broader access to, higher education.
