New Jersey Provides Tax Deduction for College Savings Plan Contributions 

Under the New Jersey College Affordability Act, New Jersey will allow a state income tax deduction of $10,000 per taxpayer with a gross income of $200,000 or less for contributing to a college savings plan.  Contributions to a college savings plan include payments made directly towards in-state tuition.  Individual taxpayers include spouses and dependents.  

In addition, under the New Jersey College Loans to Assist State Students loan program, taxpayers making $200,000 or less will be allowed to deduct up to $2,500 from gross income for the principal and interest paid on a student loan. 

These benefits will become effective beginning in tax year 2022.

Shaddai Jaquez, CPA, MS is a Tax Manager at SobelCo.