TRENTON - Residents who put money into a state-run college savings plan would receive an income-tax break under legislation pushed yesterday by an Assembly panel. The bill would provide a state income-tax deduction for the first $5,000 contributed annually to the New Jersey Better Educational Savings Trust program, a college savings plan administered through the New Jersey Higher Education Student Assistance Authority.
"Money put aside to pay for a child's college education should be safeguarded, not taxed," said a sponsor of the bill, Assemblyman Fred Scalera (D., Essex). The Assembly Higher Education Committee released the measure, voting 7-0. It can now be considered by the Assembly Appropriations Committee. Senate committees have approved the measure, but not the full Senate.
Assemblyman Lou Greenwald (D., Camden), another sponsor, said current state law penalized parents for saving money for college. "Money being put into NJ BEST should be just as tax-free as the money that eventually comes out to pay tuition bills," he said. - AP