Sponsored by:
Senator THOMAS H. KEAN, JR.
District 21 (Morris, Somerset and Union)
SYNOPSIS
Allows limited gross income tax deduction for charitable contributions to certain New Jersey-based charitable organizations.
CURRENT VERSION OF TEXT
As introduced.
An Act allowing a limited gross income tax deduction for charitable contributions to certain New Jersey-based charitable organizations, supplementing chapter 3 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 to deduct from gross income the amount of charitable contributions the taxpayer made to a qualified New Jersey-based charitable organization in the taxable year in an amount not to exceed $20,000 for a married couple filing jointly, $10,000 for a married person filing separately, or $10,000 for an individual filing as a single taxpayer or an individual determining tax pursuant to subsection a. of N.J.S.54A:2-1.
b. The deduction allowed pursuant to this section shall only be allowed if the charitable contributions would qualify for the charitable contributions deduction pursuant to section 170 of the federal Internal Revenue Code (26 U.S.C. s.170); provided, however, that (1) a taxpayer shall be allowed the deduction pursuant to this section regardless of whether the taxpayer claimed the deduction for federal tax purposes, and (2) the percentage limitations of section 170 of the federal Internal Revenue Code (26 U.S.C. s.170) shall not apply to the deduction allowed pursuant to this section.
c. For the purposes of this section, “qualified New Jersey-based charitable organization” means a charitable organization that: maintains an office, employs persons, and provides services in this State; and is registered pursuant to the “Charitable Registration and Investigation Act,” P.L.1994, c.16 (C.45:17A-18 et seq.) or is exempt from those registration requirements pursuant to section 9 of P.L.1994, c.16 (C.45:17A-26).
2. This act shall take effect immediately and apply to charitable contributions made in taxable years beginning on or after the January 1 next following the date of enactment.
STATEMENT
This bill allows a gross income tax deduction for charitable contributions that are made to New Jersey-based charitable organizations. The bill provides that the amount of the deduction cannot be more than $20,000 for a married couple filing jointly, $10,000 for a married person filing separately, or $10,000 for an individual filing as a single taxpayer.
The federal charitable contributions deduction is only allowed if the taxpayer itemizes deductions on their federal tax return. This means that if a federal taxpayer takes the standard deduction instead of itemizing deductions, the taxpayer cannot claim a charitable contributions deduction on their federal tax return. In contrast, the deduction allowed by this bill is allowed regardless of whether the taxpayer itemized deductions or took the standard deduction on their federal tax return. However, the deduction allowed by this bill is tied to the federal charitable contributions deduction for purposes of what qualifies as a charitable contribution.