Bill Text: NJ S755 | 2010-2011 | Regular Session | Introduced
Bill Title: Provides gross income tax deduction for certain savings deposits and interest accrued thereon in the remaining portion of taxable year 2009, taxable year 2010 and taxable year 2011.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2010-01-12 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S755 Detail]
Download: New_Jersey-2010-S755-Introduced.html
STATE OF NEW JERSEY
214th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2010 SESSION
Sponsored by:
Senator JENNIFER BECK
District 12 (Mercer and Monmouth)
SYNOPSIS
Provides gross income tax deduction for certain savings deposits and interest accrued thereon in the remaining portion of taxable year 2009, taxable year 2010 and taxable year 2011.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act providing a gross income tax deduction for certain savings deposits and interest accrued thereon in the remaining portion of taxable year 2009, taxable year 2010 and taxable year 2011, supplementing chapter 3 of Title 54A of the New Jersey Statutes and amending P.L.1965, c.4.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. (New section) A taxpayer shall be allowed to deduct from gross income an amount equal to qualified savings deposits made by the taxpayer during the qualified savings period.
b. A taxpayer shall be allowed to deduct from gross income an amount equal to the interest accrued on qualified savings deposits during the qualified savings period.
c. If a taxpayer's filing status is single, married or civil union filing separately, head of household, qualifying widow, widower or surviving civil union partner, the total amount of deductions allowed under subsections a. and b. of this section shall not exceed $5,000 for a taxable year. If a taxpayer's filing status is married or civil union filing jointly the total amount of deductions allowed under subsections a. and b. of this section shall not exceed $10,000 for a taxable year.
d. A qualified savings deposit and interest accrued thereon shall not be withdrawn from a qualified savings account for 12 months from the date of deposit or accrual, as may apply, except to meet a qualified emergency.
e. Funds which are used for a deduction under this section in one taxable year shall not be used for a deduction under this section in another taxable year.
f. As used in this section:
"Qualified emergency" means unforeseen circumstances requiring the expenditure of qualified savings deposits or interest accrued thereon to meet costs, which cannot otherwise be reasonably met, of living expenses in the event of a loss of employment, necessary medical expenses, necessary repairs to a dwelling house which arise from a fire, storm, natural hazard or act of God and debt obligations upon which the taxpayer would otherwise default.
"Qualified savings account" means a conventional savings account, a money market deposit account and a certificate of deposit.
"Qualified savings deposit" means placing money into a qualified savings account during the qualified savings period. Qualified savings deposits shall include but are not limited to the authorized withholding of an employee's salary or wages by an employer, in the manner required under section 4 of P.L.1965, c.4 (C.34:11-4.4.), for deposit into a qualified savings account during the qualified savings period on behalf of the employee.
"Qualified savings period" means on and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) but before January 1, 2012.
2. Section 4 of P.L.1965, c.173 (C.34:11-4.4) is amended to read as follows:
4. No employer may withhold or divert any portion of an employee's wages unless:
a. The employer is required or empowered to do so by New Jersey or United States law; or
b. The amounts withheld or diverted are for:
(1) Contributions authorized either in writing by employees, or under a collective bargaining agreement, to employee welfare, insurance, hospitalization, medical or surgical or both, pension, retirement, and profit-sharing plans, and to plans establishing individual retirement annuities on a group or individual basis, as defined by section 408 (b) of the federal Internal Revenue Code of 1986 (26 U.S.C.s.408(b)), or individual retirement accounts at any State or federally chartered bank, savings bank, or savings and loan association, as defined by section 408 (a) of the federal Internal Revenue Code of 1986 (26 U.S.C.s.408(a)), for the employee, his spouse or both.
(2) Contributions authorized either in writing by employees, or under a collective bargaining agreement, for payment into company-operated thrift plans; or security option or security purchase plans to buy securities of the employing corporation, an affiliated corporation, or other corporations at market price or less, provided such securities are listed on a stock exchange or are marketable over the counter.
(3) Payments authorized by employees for payment into employee personal savings accounts, such as payments to a credit union, savings fund society, savings and loan or building and loan association; payment into a qualified savings account; and payments to banks for Christmas, vacation, or other savings funds; provided all such deductions are approved by the employer.
(4) Payments for company products purchased in accordance with a periodic payment schedule contained in the original purchase agreement; payments for employer loans to employees, in accordance with a periodic payment schedule contained in the original loan agreement; payments for safety equipment; payments for the purchase of United States Government bonds; and payments to correct payroll errors; provided all such deductions are approved by the employer.
(5) Contributions authorized by employees for organized and generally recognized charities; provided the deductions for such contributions are approved by the employer.
(6) Payments authorized by employees or their collective bargaining agents for the rental of work clothing or uniforms or for the laundering or dry cleaning of work clothing or uniforms; provided the deductions for such payments are approved by the employer.
(7) Labor organization dues and initiation fees, and such other labor organization charges permitted by law.
(8) Contributions authorized in writing by employees, pursuant to a collective bargaining agreement, to a political committee, continuing political committee, or both, as defined in section 3 of P.L.1973, c.83 (C.19:44A-3), established by the employees' labor union for the purpose of making contributions to aid or promote the nomination, election or defeat of any candidate for a public office of the State or of a county, municipality or school district or the passage or defeat of any public question , subject to the conditions specified in section 2 of P.L.1991, c.190 (C.34:11-4.4a).
(9) Contributions authorized in writing by employees to any political committee or continuing political committee, other than a committee provided for in paragraph (8) of this subsection, for the purpose of making contributions to aid or promote the nomination, election or defeat of any candidate for a public office of the State or of a county, municipality or school district or the passage or defeat of any public question, subject to the conditions specified in section 2 of P.L.1991, c.190 (C.34:11-4.4a); in making a payroll deduction pursuant to this paragraph the administrative expenses incurred by the employer shall be borne by such committee, at the option of the employer.
(10) Payments authorized by employees for employer-sponsored programs for the purchase of insurance or annuities on a group or individual basis, if otherwise permitted by law.
(11) Such other contributions, deductions and payments as the Commissioner of Labor may authorize by regulation as proper and in conformity with the intent and purpose of this act, if such deductions are approved by the employer.
(c.f: P.L.1997, c.35, s.1.)
3. This act shall take effect immediately.
STATEMENT
This bill provides a gross income tax deduction for certain savings deposits and earnings in the remaining portion of taxable year 2009, taxable year 2010 and taxable year 2011. The purpose of this measure is to inject liquidity into New Jersey banks and encourage New Jersey gross income taxpayers to amass greater personal savings.
This bill allows a taxpayer to take a deduction for qualified savings deposits, and earnings thereof, made in the remaining portion of taxable year 2009, taxable year 2010 and taxable year 2011. The total deduction allowed in one taxable year may not exceed $5,000 for a taxpayer filing individually and $10,000 for taxpayers filing jointly. Funds which are used for a deduction in one taxable year may not be used again for this deduction in a different taxable year.
Qualified deposits include those made to conventional savings accounts, money market deposit accounts and certificates of deposits. Qualified deposits may be made by an employer on behalf of an employee through the withholding of wages and salary.
The bill places a condition on the qualified savings deposits, and earnings thereof. To maintain the deductibility of such funds, they may not be withdrawn from their respective accounts for one year from the date of deposit or accrual. The bill does provide an exception to the one year withdrawal limitation for meeting the costs of certain unforeseen emergency circumstances, such as unemployment, medical necessity, repair to one's home necessitated by fire or natural hazard and default on debt obligations.
