Here & Now: Tax Credit Scholarships in NJ
The tuition gamechanger is here.
We’ve heard about it. We’ve dreamed about it.
Now, we are moving to the next phase in our efforts as we introduce a Tax Credit Scholarship bill to bring tuition relief here to New Jersey’s families.
What is a Tax Credit Scholarship?
Tax credit scholarship programs create K-12 scholarships for children attending nonpublic schools by providing a tax break for corporations and individuals donating to Scholarship Granting Organizations (SGOs).
How Do tax-credit scholarships work?
Taxpayer (primarily corporations) makes a contribution to a Scholarship Granting Organization (SGO)
Students apply for scholarships from the SGO.
SGO awards scholarships to students using taxpayer contributions.
Taxpayer files state taxes, receiving a credit generally equal (or close to equal) to the amount they contributed.
Here’s how you can help make this happen
We need your partnership to make tax credit scholarships a reality.
Contact legislators through action alerts, letter writing, events and direct calls
Let your friends, family and neighbors know about this important initiative - flood your social media and WhatsApp groups so this campaign is front and center
Donate and/or join a team to help raise critical funds for this effort
Get involved and make a difference for the future of Jewish education
FAQ
A tax credit is a discount on your annual tax bill. For example, if someone owes $10,000 in taxes in 2024 and they receive a $1,000 tax credit, then their actual 2024 tax bill will be $9,000.
Both credits and deductions can reduce your tax bill, but tax credits are simpler and more direct.
A tax credit directly reduces your tax bill by the credit amount.
A tax deduction reduces your taxable income. For example, if someone with annual income of $100,000 receives a tax deduction for $10,000, their taxes are calculated as they made $90,000.
Scholarships would be limited to low and middle-income students (i.e. family income <$200,000, adjusted based on family size). A single Scholarship Organization would accept all tax creditable donations and distribute all scholarships – spending no more than 5% on administrative costs.
Nonpublic schools contribute billions of dollars to the state economy, provide a valuable education to over 10% of the state’s children, and save local public school systems over $2.5 billion per year. Offering tax credits to investing in these students and schools is as sensible as offering tax credits to attract jobs and businesses to the state.
This depends on how many apply – the range can vary, but we will be starting from a place that will already make a big dent in tuition.
By relieving their tuitions bills by thousands of dollars.
Big corporations have no trouble raising funds in states with even larger programs.
A tax credit scholarship program is funded by incentivizing taxpayers to direct their tax money directly to a K-12 scholarship fund.
A taxpayer (mainly corporations, but individuals as well) who donates $10,000 to a Scholarship Organization would reduce their end-of-year tax bill by $10,000. The Scholarship Organization would take these donated funds and distribute them as scholarship for eligible students to attend nonpublic schools.
Our proposed New Jersey Scholarship Tax Credit uses private dollars, and any reductions in tax revenue come from the general fund – not state or local education budgets.
The proposed scholarships would be available to any low and middle-income students (i.e. family income <$200,000, adjusted based on family size) across the state – regardless of religion, cultural background, or location.