3 MORE Potential Tax Deductions For NJ Residents

by | Feb 9, 2023 | Videos

In this week’s video, Tom discusses 3 more potential tax deductions for New Jersey taxpayers. These new deductions became available under the recently passed New Jersey College Affordability Act.

If you have young children, go to a New Jersey state school or have New Jersey student loans be sure to check this episode out to hear if you can deduct certain items from your taxes.

Show Notes

New Tax Deduction For New Jersey 529 Accounts – Mullooly Asset Show

New Jersey College Affordability Act – NJ Department of Taxation

3 MORE Potential Tax Deductions for NJ Residents – Full Transcript

**Click here for a full downloadable PDF version of this transcript**

Tom Mullooly: We found three additional tax breaks from our friends in Trenton for New Jersey taxpayers, and we’re going to talk about it in this video.

Welcome to the Mullooly Asset Show. I’m your host, Tom Mullooly, and today we want to talk about some additional tax breaks that you may qualify for as a New Jersey resident. We talked in the last video about a new tax break for people who are plowing money into the New Jersey version of the 529 accounts under NJBEST, and we’ll link to that video down below.

But we have three more tax breaks for some New Jersey taxpayers. Let’s get into it. The first one is that New Jersey now has a child tax credit for kids. This is important to note. It’s not a childcare tax credit. It’s just a tax credit if you have a kid, a youngster in your home, who is five years of age or younger.

That’s actually a pretty nice deal. The catch, there’s always a catch, is you get a $500 tax credit, which actually could be pretty valuable, you get that $500 tax credit if your taxable income is $30,000 or less, and it continues to phase out as your income goes up.

By the time you get to $80,000 in New Jersey taxable income, that tax credit is fully phased out. It’s not going to be for you, or it may not apply to your situation, but I’m going to bet that you know someone where this really would apply and would be pretty helpful for them. The second tax break that we want to talk about in this video is if you have an NJCLASS student loan.

That’s a very specific kind of student loan that’s offered by the State of New Jersey. It’s called NJCLASS. If you have it, you know what I’m talking about. You can now deduct up to $2,500 in principle and interest payments paid on these loans. That has never been available before. The third tax break that I wanted to mention today is there is now a deduction for tuition payments.

You can deduct up to $10,000 in tuition paid to attend a New Jersey college or a New Jersey university. We’ve never had these things before. In my opinion, it’s nice, a little too late for a lot of people, but it’s helpful. This all fell under this bucket or this umbrella of the New Jersey College Affordability Act.

The provisions mentioned in this and the previous video, so NJBEST, the NJCLASS loans, and these tuition payments, all of these are subject to the $200,000 income threshold that we mentioned in the last video. Again, New Jersey is a very expensive place to live. There’s no secret about that. But finally, we can say the state is doing something to help some taxpayers deflect some of this income. It’s a step in the right direction. It’s a small step, but it’s a step in the right direction. You have to keep your eyes open for these things.

Sometimes folks do their tax returns on their own, or they have some kind of automated software that they try and do on their own and they miss these things, because this just came out in the last 60 days. Unless you’ve got an accountant with a really sharp pencil, you could miss things like this.

That’s the message for today’s video. Thanks, again, for tuning in. Don’t forget to hit that red subscribe button below.

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