Would Provide Tax Deduction for College Savings, Tax Credits for Vets’ Counseling
TRENTON – The Senate Budget and Appropriations Committee yesterday released two bills sponsored by Majority Leader Barbara Buono (D-Middlesex) that would change state income tax laws to benefit families saving for their child’s education and veterans returning from war.
“Providing a tax break can be a powerful tool to help residents make a better future for themselves and their families,” said Buono. “We should be helping a family put their child through college and ensuring a returning veteran gets the help they need.”
Under the first bill (S-668), some investments in the New Jersey Better Educational Savings Trust (NJ BEST) 529 college savings plan would be tax-free. Couples filing a joint tax return would be able to deduct the first $10,000 contributed annually; single filers would be able to deduct up to $5,000. NJ BEST is administered by the New Jersey Higher Education Student Assistance Authority and managed by Franklin Templeton Investments.
“We should be helping parents save for their children’s college education,” said Buono. “As the cost of college continues to increase, families will be relying on their savings to keep their hopes for their children’s futures alive. We need to give these families a greater incentive to put away money now, so the dream of a college education can be realized.”
Under federal tax law, earnings realized through a 529 account used for qualified higher education expenses are never taxed.
“Many other states already provide a tax incentive for families trying to save for college,” said Buono. “We need to make this common sense change to help our working families who are already saving whatever they can to do right for their kids’ futures.”
The measure is cosponsored by Sen. Thomas H. Kean, Jr. (R-Union/Essex/Morris/Somerset).
The second Buono bill (S-1026), would make returning veterans eligible for a direct state income tax credit of up to $10,000 for unreimbursed psychiatric treatment – counseling that is not covered by insurance. Buono said the bill would help mitigate the continuing epidemic of suicides by returning Iraq and Afghanistan veterans who are suffering from Post Traumatic Stress Disorder (PTSD).
“The immense stress felt by many of our returning war heroes is real, and can be just as deadly as combat itself,” said Buono. “But when it comes to seeking the psychological help that can literally mean life or death, bureaucratic hurdles, insurance red tape and increasing expenses often mean many go untreated. Unless we make it easier for veterans to get this help, more and more veterans will view suicide as the only means of shedding the mental scars of war.”
The bill is also sponsored by Sen. Christopher Connors (R-Ocean).
“Veterans and their families should not have to worry that the expense of counseling will keep them and their loved ones from getting the treatment they need,” said Buono. “A direct tax credit can provide the financial incentive these veterans need to not only enter treatment, but get better.”
Both bills now are poised for votes in the full Senate.