Frequently Asked Questions
What is a Tax Credit?
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.
How is it different from a tax deduction?
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 if they made $90,000.
What would a tax credit scholarship in New Jersey look like?
Scholarships would be limited to low and middle-income students (i.e. family income <$200,000, adjusted based on family size). A single Scholarship Granting Organization would accept all tax creditable donations and distribute all scholarships – spending no more than 5% on administrative costs.
Why is this good policy?
Nonpublic schools contribute billions of dollars to the state economy, provide a valuable education to over 10% of the state’s children, and are responsible for the creation of more than 36,370 of jobs in the state. The "New Jersey Student Support Act" provides educational opportunities for tens of thousands of our students, freeing up seats in public schools, while providing valuable resources to the state, and its educational ecosystem.
Realistically, how big will these scholarships be?
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.
How will this help families?
Low and middle-income families would be provided thousands of dollars in tuition relief.
How will we coordinate $250m in tax credit donations every year?
Big corporations have no trouble raising funds in states with even larger programs.
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The proposed Tax Credit Scholarship bill in New Jersey will create educational opportunities for New Jersey's families by easing the burden of tuition, while at the same time benefiting the state's school system and economy, overall. Join me and help make Tax Credit Scholarships a reality in New Jersey!