New Jersey Charitable Giving Incentive
State Income Tax Charitable Deduction
Dropped from Transportation Trust Fund Package
Updated October 17, 2016
The latest compromise package negotiated by Governor Christie and Senate and Assembly
Leaders to end the impasse over the Transportation Trust Fund does not include a New Jersey income tax deduction for contributions to charity.
New Jersey income tax deduction
for contributions to certain charities was passed by the Senate
Budget and Appropriations Committee and the Assembly Budget
Committee on June 23, 2016 as part of a larger deal which would have also increased gasoline taxes to fund the Transportation Trust
Fund, phased out the estate tax, increased the earned income tax
credit, among other provisions.
That deal fell apart in late June when the Governor and Assembly Speaker separately negotiated a package that included a sales tax reduction instead of some of the elements of the earlier bill.
The new TTF package, which was
signed into law on October 14, 2016, includes a
23-cent/gallon increase in the gas tax; increase in the Earned
Income Tax Credit; a phaseout of the estate tax in New Jersey; tax deductions for
retirement income; a tax deduction for veterans; and a reduction in
the sales tax.
The Center for Non-Profits has a long-standing
strong support of a state-level charitable giving incentive. Our recent survey
New Jersey Non-Profits 2016: Trends and Outlook, has
raised significant concerns about the ability of
chronically under-funded organizations to meet
ever-increasing community needs. Moreover, New Jersey is
among the minority of states without any state-level giving
incentive, and IRS data indicate that charitable giving, as
measured by federal charitable tax deductions claimed by New
Jersey households, was still below 2007 pre-recession levels
While we are disappointed that the charitable deduction was
dropped from the final package, we remain committed to pursuing initiatives that would encourage greater charitable giving.
For more information about the charitable giving proposals, contact Linda Czipo at the Center
or email lczipo @ njnonprofits.org.
Watch our web page, your email and follow us on social media (Facebook,
Charitable giving deduction bills introduced in the current session include:
S-2411 (Sarlo/Oroho) /
A-11 (Prieto) would create a New Jersey charitable income tax
deduction the deduction,
applicable to contributions made to New Jersey safety net
organizations that are eligible to participate in the
State Employees Charitable Campaign (NJSECC), the workplace giving
program for New Jersey state employees. Currently approximately
1,100 organizations participate in the NJSECC, but new charities
could apply and, if accepted, be eligible for the state
tax-deductible contributions under the bill. The deduction would be available to all taxpayers, not just
government employees, who contribute to eligible charities, and
taxpayers would be able to deduct contributions of up to 50% of New
Jersey taxable income.
The deduction was part of a
broader tax package to fund the Transportation Trust
Fund. Other elements in the legislation include
provisions to raise the Earned Income Tax Credit, phase
out the estate tax, raise the taxable threshold for
retirement and pension income, and increase certain
taxes on petroleum products. Although this bill passed
both the Senate Budget & Appropriations Committee and
the Assembly Appropriations Committee, it has since been
replaced by another package that does not include a
charitable giving incentive. The Center supported this
legislation, but has gone on record as preferring an
approach that would allow the broad spectrum of
charities to be able to benefit. Read our summary of S-2411/A-11
S-334 (Kean/Codey) would provide a New Jersey
income tax deduction for charitable contributions. The
deduction mirrors the federal income tax deduction and is
allowed regardless of whether the federal itemized deduction
is taken by the taxpayer. The bill was pre-filed for introduction in
the 2016-2017 legislative session. It has been reintroduced
over numerous legislative sessions but has not been
scheduled for hearings during that time. Cosponsors
include Senate President Sweeney and Senators Van Drew,
Oroho, Doherty and Bucco.
S-334 has been referred to the
Senate Budget and Appropriations Committee. Its Assembly
A-2717 (Bucco/Johnson/Munoz), which is in the
Assembly Appropriations Committee.
S-1932 (Kean), which would provide for a New Jersey
income tax deduction for charitable contributions made
to New Jersey-based charitable organizations, was
introduced on March 10, 2016, and has been
part of the state budget discussions this spring. Cosponsors include Senators Beck,
Oroho, Bucco and Addiego. S-1932 has been referred to
the Senate Budget and Appropriations Committee. Its Assembly counterpart,
A-3730 (Singleton/Webber), was introduced May 19,
2016, and is in the Assembly Budget Committee.
S-1932/A-3730 would permit a taxpayer to deduct from NJ income taxes the amount of charitable contributions made to a “qualified New Jersey-based charitable organization” equal to the amount that is allowable as a charitable deduction under federal income taxes. Like S-334/A-2717, a taxpayer need not itemize on their federal return in order to claim the state deduction. The main difference is that S-1932/A-3730 would only allow deductions of contributions made to “qualified” New Jersey-based organizations, defined in the bill as:
a charitable organization that is registered pursuant to the "Charitable Registration and Investigation Act," P.L.1994, c.16 (C.45:17A-18 et seq.), or an organization that is exempt from the registration requirements of that act pursuant to section 9 of P.L.1994, c.16 (C.45:17A-26), and that maintains an office, employs persons, and provides services in this State. [emphasis added]
S-2383 (Beck) would provide a New Jersey
income tax deduction for charitable contributions as part of a larger bill that would also reduce the estate tax, increase the earned income tax credit, and provide certain other deductions for fuel purchases and retirement income. The charitable deduction would be similar to that provided in S-334. The bill was introduced June 20 and
referred to the Senate Budget and Appropriations Committee.
Assembly Appropriations Committee.
For more information about the charitable giving bills or
the Center’s positions, contact Linda Czipo
at the Center
or email lczipo @ njnonprofits.org.
Read our blog -
Why New Jersey Needs a Charitable Giving Deduction
The Center’s advocacy, communications and technical assistance services would not be possible without the direct support of Center members.
If your organization is a dues-paying member, we thank you for your support and involvement which help to sustain this work.
If your organization is not yet a member, explore the many benefits of membership at www.njnonprofits.org/Membership.html . Membership is a sound investment in your organization and in New Jersey's non-profit community for the people of our state.
Simply put, the more members we have, the stronger we can be for you. Dues start at just $99/year; join today!