A package of bills geared towards making college more affordable for children of working families cleared a key Assembly panel on Monday.
The first bill would create a gross income tax credit for full time attendance at New Jersey institutions of higher education, county colleges and accredited post-secondary training schools.
The tax credit would be equal to 10 percent of tuition costs up to $10,000 paid by a taxpayer either for a resident dependent under 22 years of age or for the taxpayer’s own full time attendance in New Jersey. Taxpayers with gross incomes of up to $150,000 would be eligible for the tax credit.
The second bill would offer incentives for families to save for college by allowing a gross income tax deduction for amounts contributed to the New Jersey Better Educational Savings Trust (NJBEST), which is the state’s IRS Section 529 qualified college savings program.
Federal tax law allows contributions of federally taxed income to accounts established for a beneficiary’s qualified higher education expenses. Account investment earnings are not federally taxed until withdrawn, and if the earnings are used for qualified higher educational expenses they are never taxed. Currently, New Jersey matches those federal tax advantages.
The bill would allow a gross income tax deduction of up to $10,000 annually for married couples filing jointly, $5,000 annually for other taxpayers, for contributions to one or more NJBEST accounts.
The third bill would help ease certain college costs for veterans and members of the Armed Forces by requiring public institutions of higher education to waive their application fee, as well as any fees for the receipt or transmission of a transcript for each veteran, member of the Armed Forces of the United States, or member of the New Jersey National Guard who resides in the state. College application fees for New Jersey institutions typically average $50-65.
The fourth bill provides a sales tax exemption on parking for commuter students or students who live in non-university housing. Currently, residential students who live in official university housing are exempt from this tax. Under the bill, this exemption would be limited to student parking provided by colleges or universities that have applied, and have been certified, for sales tax-exempt status by the Division of Taxation in the Department of Treasury.
The bills all cleared the Assembly Higher Education Committee and have now been referred to the Assembly Appropriations Committee.