TRENTON – A Senate committee released legislation that would provide residents who save for their children’s college education through a state-administered college savings plan with a state income tax deduction for their investments.
Under the bill (S-668) couples filing a joint tax return would be able to deduct the first $10,000 contributed annually to the New Jersey Better Educational Savings Trust (NJ BEST) program; single filers would be able to deduct up to $5,000. NJ BEST is a 529 college savings plan administered by the New Jersey Higher Education Student Assistance Authority and managed by Franklin Templeton Investments.
Under federal tax law, earnings realized through a 529 account used for qualified higher education expenses are never taxed.
The bipartisan bill is sponsored by Sen. Barbara Buono (D-Middlesex) and Sen. Thomas H. Kean, Jr. (R-Union). It was unanimously released from the Senate Education Committee.
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