Bill > S1451

Introduced Session

This bill establishes an incentive for New Jersey residents who have graduated from a community college, college or university, or graduate school to stay, or return to, New Jersey after their graduation and for employers to hire college graduates to work in this State and subsidizes their loan payments. The bill provides qualified taxpayers and businesses with a credit against the gross income tax (GIT) or the corporation business tax (CBT) for certain educational loan payments. The tax credit is allowed for any payments made by a taxpayer or on behalf of a taxpayer during the taxable or privilege period on a loan which is: (1) secured through a State student loan program, a federal student loan program, or a commercial lender and which is (2) obtained and expended exclusively for purpose of paying the tuition and fees and other expenses such as room and board and book and books and supplies, related directly to the enrollment of the qualified taxpayer at an institution of higher education. Under the bill, the GIT credit is equal to payments made by a qualified taxpayer, during that part of the taxable year they were employed in the State. The GIT credit for an individual taxpayer is equal to the lesser of: (1) the taxpayer's monthly loan payments multiplied by the number of months the taxpayer made loan payments; or (2) the benchmark loan payment multiplied by the number of months during the taxable year in which a taxpayer made loan payments. The GIT credit is refundable if an individual taxpayer earned an associate's degree or a bachelor's degree in science, technology, engineering, or mathematics. The refundable GIT credit is available only to individual taxpayers and is not available to a business that makes loan payments on behalf of an employee. A gross income taxpayer who is an employer or a business subject to the CBT may receive a tax credit equal to any payments made on behalf of a qualified employee who graduated from an accredited institution of higher education and was employed in New Jersey during the tax year. The GIT credit for a taxpayer who is an employer and the CBT credit are equal to the monthly loan payment made by the employer multiplied by the number of loan payments made by a taxpayer on behalf of a qualified employee during a taxable year or privilege period. The credit is reduced to 50 percent if a qualified employee is employed on a part-time basis. The bill defines a qualified employee as a resident taxpayer who (1) obtained an associate's degree or a bachelor's degree from an accredited institution of higher education or a graduate degree from an accredited institution of higher education who was employed in this State during the privilege period; and (2) was employed in New Jersey on a full-time or part-time basis by an employer, was a self-employed individual, or was an active duty member of the United States Armed Forces, New Jersey National Guard, or the Reserve Component of the United States Armed Forces.

AI Summary

Committee Categories

Jim Beach (D)*,  Joe Lagana (D)*, 

Introduced in the Senate, Referred to Senate Higher Education Committee (on 01/09/2024)

Official Document