Tax Deductions
Starting from Tax Year 2022 and beyond, the New Jersey College Affordability Act permits three Income Tax deductions for individuals with a gross income of $200,000 or lower on their tax returns. These deductions encompass contributions to an NJBEST 529 savings plan, payments towards an NJCLASS student loan, and tuition expenses for New Jersey colleges and universities.
New Jersey Better Educational Savings Trust (NJBEST)
You have the option to deduct a maximum of $10,000 for contributions made to an NJBEST account in a given year.
For instance, if you contribute $1,000 per month starting in January, and your gross income is $200,000 or below, you are eligible to deduct the full $10,000.
New Jersey residents may also be eligible for additional benefits from the Higher Education Student Assistance Authority (HESAA) through the NJBEST 529 College Savings Plan.
New Jersey College Loans to Assist State Students (NJCLASS)
If your gross income is $200,000 or less, you have the option to deduct up to $2,500 for the principal and interest paid on student loans throughout the year through NJCLASS.
New Jersey Higher Education Institution Tuition Costs
Should you, your spouse, or a dependent enroll and attend a higher education institution in New Jersey, you have the opportunity to deduct tuition costs, with a maximum limit of $10,000.
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