Are there any tax benefits to contributing to a NJ 529 Plan?
Financial Planning Taxes College PlanningA 30-second read by the Baron Team: Prior to tax year 2022, 529 contributions were not tax-deductible. For 2022 and beyond, the New Jersey College Affordability Act allows 3 kinds of income tax deductions if your gross income is $200,000 or less on your tax return.
The NJ Division of Taxation outlines them as follows:
- New Jersey Better Educational Savings Trust (NJBEST)
- NJBEST is New Jersey's 529 College Savings Plan
- You can deduct up to $10,000 of contributions made in a year to a NJBEST account
- To learn more about the NJBEST program, visit njbest.com.
- New Jersey College Loans to Assist State Students (NJCLASS)
- You can deduct up to $2,500 of principal and interest paid on student loans for the year
- You can deduct up to $2,500 of principal and interest paid on student loans for the year
- New Jersey Higher Education Institution Tuition Costs
- If you, your spouse or a dependent attend a NJ higher education institution, you can deduct up to $10,000 for the tuition fees
Please reach out to the Baron team if you have any questions on this topic.
Disclosure: This is a general communication being provided for informational purposes only. This material is not intended to be relied upon as a forecast, research, tax or investment advice. Please consult your financial planning and tax professional for personal advice.