Senate panel to weigh new college tax breaks

The bills would create an income tax deduction for tuition payments and tax credits for community college enrollees or their parents. (Hal Brown for New Jersey Monitor)

Senate lawmakers will weigh two measures Monday that would extend new tax breaks to college students and their parents.

One of the bills before the Senate Higher Education Committee would allow taxpayers to deduct tuition payments made for their education or that of a dependent partner or child from their state income tax bills.

Residents would be able to claim the deduction if their income does not exceed $85,000 in the relevant tax year.

Tuition paid through student loans is considered tuition paid by the student or parent, said a Treasury spokesperson who spoke generally , so such payments would qualify for the deduction.

A separate bill would create tax credits for community college students or their parents.

Parents who paid at least half of their dependent child’s tuition and other expenses at a community college would be eligible for a tax credit equal to the amount they paid or $750, whichever is lower, if the child is a full-time student and under the age of 22.

Parents of part-time students would receive halved awards, to a cap of $375 , and the credits created by the bill are exclusive with an existing $1,000 tax deduction for parents who pay at least half of their child’s college expenses.

Only parents of full-time college students are eligible for the existing deduction.

Students who pay their own way through community college would be eligible for the same state income tax credits under the bill , though only a student or their parents could receive the credit, not both.

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