New Jersey Senate Bill S3017

New Jersey 2022-2023 Regular Session

• Introduced: 9/22/22
• Refer: 9/22/22

Caption

"Student Loan Debt Relief Tax Credit Act"; establishes gross income tax credit of up to $5,000 for certain student loan payments and makes an appropriation.

Impact

The bill establishes a structured process within the New Jersey tax framework whereby taxpayers can apply for a credit against their gross income tax. These tax credits are designed to be used specifically for repaying student loans in the two years following receipt of the credit. Additionally, the total value of credits issued under this law is capped at $10 million per fiscal year, which establishes a clear limit on the financial impact to the state budget but also potentially restricts the number of taxpayers who can benefit from this initiative.

Summary

Senate Bill S3017, known as the 'Student Loan Debt Relief Tax Credit Act,' proposes to provide a refundable gross income tax credit of up to $5,000 for qualified taxpayers making student loan payments. To qualify, a taxpayer must have accumulated at least $20,000 in student loan debt for higher education and have a minimum of $5,000 outstanding when applying for the tax credit. This initiative aims to alleviate some of the financial burden faced by individuals with significant student debt, by providing taxpayers relief through tax refunds.

Contention

Discussions surrounding S3017 may evoke points of contention regarding the efficiency and adequacy of the measures it proposes to alleviate student debt. Critics might question the sufficiency of a $5,000 credit in addressing the broader student debt crisis, while supporters argue that it represents a meaningful step towards aiding individuals burdened with repaying student loans. Furthermore, the prioritization of applications based on debt-to-income ratios and residency status could also spark debate among stakeholders about fairness and accessibility of the program.