Allows gross income tax deduction for charitable contributions to certain New Jersey-based charitable organizations.
Impact
Upon enactment, the bill will have immediate effects for taxable years beginning after January 1 of the year following its adoption. It will enable taxpayers to claim deductions on their state income tax forms for donations made to qualified organizations, thus potentially increasing funding for local charities and enhancing their financial stability. This aligns state tax policies with federal standards, ensuring consistency that could improve taxpayer compliance and ease of understanding regarding charitable giving.
Summary
A2633 is a proposed legislation in New Jersey that aims to allow a gross income tax deduction for charitable contributions made to certain New Jersey-based charitable organizations. The intent of the bill is to encourage philanthropy and support of local charities by making contributions more financially attractive to residents. Specifically, it permits taxpayers to deduct the same amount of charitable contributions that is deductible on their federal adjusted gross income, as per section 170 of the Internal Revenue Code.
Contention
Notable points of contention may arise over the definition of 'qualified New Jersey-based charitable organization' outlined in the bill. Organizations must be registered under specific state regulations and provide services within the state. Critics may argue that this requirement could limit the scope of eligible charities and hamper fundraising efforts for certain philanthropic efforts. Additionally, potential debates could emerge around its fiscal implications for state revenues, questioning whether increased deductions could offset funding for state programs.