Establishes tax credit for portion of qualifying educational expenditures made by taxpayer on behalf of child.

S3928

SENATE, No. 3928

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 12, 2026

Sponsored by:

Senator� ANGELA V. MCKNIGHT

District 31 (Hudson)

SYNOPSIS

���� Establishes tax credit for portion of qualifying
educational expenditures made by taxpayer on behalf of child.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
providing a tax credit for a portion of qualifying
educational expenditures and supplementing chapter 4 of Title 54A of the New
Jersey Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� a.� A taxpayer shall be
allowed a credit against the tax due pursuant to the �New Jersey Gross Income Tax
Act,� N.J.S.54A:1-1 et seq. equal to 25 percent of a qualified educational
expenditure made by the taxpayer for a qualifying dependent child during the
taxable year.� The amount of the credit provided for each qualified educational
expenditure shall not exceed $500 per qualifying dependent child.

���� b.��� As used in this section:

���� �Nonpublic school� means an
elementary or secondary school within the State, other than a public school,
offering education in grades kindergarten through 12 or any combination
thereof, wherein a child may legally fulfill compulsory school attendance
requirements and which complies with the requirements of Title VI of the Civil
Rights Act of 1964 (Pub.L.88-352).

���� �Qualified dependent child�
means an individual under 18 years of age at the end of the taxable year for
whom the taxpayer can claim a dependent deduction pursuant to subsection (b) of
N.J.S.54A:3-1.

���� �Qualified educational
expenditure� means an expense incurred by the taxpayer for:

���� (1) �tuition at an accredited
nonpublic school offering any combination of grades kindergarten through 12;

���� (2)�� school supplies required
as part of a course of study such as binders; book bags; calculators;
cellophane tape; blackboard chalk; compasses; composition books; crayons;
erasers; folders, including expandable folders, pocket folders, plastic
folders, and manila folders; glue, paste, and paste sticks; highlighters; index
cards; index card boxes; legal pads; lunch boxes; markers; notebooks; paper,
including loose leaf ruled notebook paper, copy paper, graph paper, tracing
paper, manila paper, colored paper, poster board, and construction paper;
pencil boxes and other school supply boxes; pencil sharpeners; pencils; pens;
protractors; rulers; scissors; and writing tablets;

���� (3)�� required instructional
materials used to learn the subject matter being taught as part of a course of
study such as textbooks, workbooks, reference books, and the purchase of
computer software whose primary purpose is for teaching or self-learning;

���� (4)�� annual school fees;

���� (5)�� transportation of the
qualified dependent child to a nonpublic school provided that payment for
transportation is made directly to the nonpublic school and the child is not
eligible for transportation services furnished by a board of education pursuant
to N.J.S.18A:39-1;

���� (6)�� payment of dues or
purchases of materials, equipment, or special clothing for participation in
extracurricular activities such as sporting events, musicals, plays, concerts,
homecoming, prom or other similar event;

���� (7)�� rental of a musical
instrument and purchases of music books, sheet music, or lessons as part of the
child�s enrollment in a music course; or

���� (8)�� fees to attend a school
field trip occurring during school hours.

���� For purposes of this section,
�qualified education expenditure� does not include expenses incurred by the
taxpayer for:

���� (1)�� private instruction or
tutoring services;

���� (2)�� the annual school
yearbook;

���� (3)�� class rings;

���� (4)�� clothing for everyday
use; or

���� (5)�� testing fees for the
Scholastic Aptitude Test (SAT), Preliminary Scholastic Aptitude Test (PSAT), or
American College Test (ACT).

���� 2.��� This act shall take
effect immediately and shall apply to taxable years beginning on or after
January 1, 2023.

STATEMENT

���� This bill would provide a
gross income tax credit to a taxpayer in an amount equal to 25 percent of each
qualified educational expenditure made by the taxpayer for a dependent child
during the taxable year.� The amount of the credit provided for each qualified
educational expenditure shall not exceed $500 per qualifying dependent child.�
The bill defines �qualified education expenditure� as expenses incurred by the
taxpayer for:

���� (1)�� tuition at a nonpublic
school offering any combination of grades kindergarten through 12;

���� (2)�� school supplies required
as part of a course of study such as binders; book bags; calculators;
cellophane tape; blackboard chalk; compasses; composition books; crayons;
erasers; folders, including expandable folders, pocket folders, plastic
folders, and manila folders; glue, paste, and paste sticks; highlighters; index
cards; index card boxes; legal pads; lunch boxes; markers; notebooks; paper,
including loose leaf ruled notebook paper, copy paper, graph paper, tracing
paper, manila paper, colored paper, poster board, and construction paper;
pencil boxes and other school supply boxes; pencil sharpeners; pencils; pens;
protractors; rulers; scissors; and writing tablets;

���� (3)�� required instructional
materials used to learn the subject matter being taught as part of a course of
study such as textbooks, workbooks, reference books, and the purchase of
computer software whose primary purpose is for teaching or self-learning;

���� (4)�� annual school fees;

���� (5)�� transportation of the
qualified dependent child to a nonpublic school provided that payment for
transportation is made directly to the nonpublic school and the child is not
eligible for transportation services furnished by a board of education under
State law;

���� (6)�� payment of dues or
purchases of materials, equipment, or special clothing for participation in
extracurricular activities such as sporting events, musicals, plays, concerts,
homecoming, prom or other similar event;

���� (7)�� rental of a musical
instrument and purchases of music books, sheet music, or lessons as part of the
child�s enrollment in a music course; and

���� (8)�� fees to attend a school
field trip occurring during school hours.

���� For purposes of defining which
nonpublic school payments qualify for a credit under the bill, a �nonpublic
school� is defined as an elementary or secondary school within the State, other
than a public school, offering education in grades K-12 or any combination
thereof, wherein a child may legally fulfill compulsory school attendance
requirements and which complies with the requirements of Title VI of the Civil
Rights Act of 1964.

���� A �qualified educational
expenditure� would not include expenses incurred by the taxpayer for private
instruction or tutoring services, the annual school yearbook, class rings,
clothing for everyday use, and testing fees for the Scholastic Aptitude Test (SAT),
Preliminary Scholastic Aptitude Test (PSAT), or American College Test (ACT).