New Jersey Assembly Bill A5342

New Jersey 2022-2023 Regular Session

• Introduced: 3/23/23
• Refer: 3/23/23

Caption

Establishes tax credit for portion of qualifying educational expenditures made by taxpayer on behalf of child.

Impact

If enacted, A5342 will significantly impact the state’s tax system by introducing a new credit aimed at supporting families with children enrolled in nonpublic schools. These expenditures include tuition and purchasing supplies necessary for the educational environment, as well as transportation costs directly related to schooling. This measure seeks to enhance educational access and affordability, particularly in circumstances where the public school system may not meet all of a family's needs. The financial implications of this credit can lead to a more supportive environment for families opting for nonpublic education pathways, fostering educational diversity within the state.

Summary

Assembly Bill A5342 aims to establish a tax credit for taxpayers in New Jersey for qualifying educational expenses incurred on behalf of their dependent children. The bill specifies that taxpayers are eligible for a credit equal to 25% of qualifying educational expenditures for each dependent child, up to a maximum of $500 per child. This tax credit is intended to alleviate some of the financial burden associated with educational costs, particularly for families utilizing nonpublic educational institutions. It reflects a growing trend of supporting parental choice in education funding, particularly for nonpublic schooling options.

Contention

Notably, the bill defines 'qualified educational expenditure' in a manner that excludes several common education-related expenses, such as private tutoring, testing fees, and everyday clothing. This exclusion may lead to debates surrounding the applicability of the credit and its ultimate fairness. Some stakeholders may argue that such exclusions limit the credit's effectiveness in truly alleviating educational costs. Additionally, discussions may arise regarding the potential for increased public funding for nonpublic institutions and the overall impact on public education funding if a significant portion of families opts for nonpublic educational avenues supported by tax credits.