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Bill

A 4871

Allows gross income tax deduction for charitable contributions made to nonprofit entities supported by State funds or subsides.

2026-2027 Regular Session Introduced by Aura Dunn

New Jersey would allow a gross income tax deduction for charitable contributions to nonprofits that are supported by state funds or subsidies.

Introduced, Referred to Assembly Commerce and Economic Development Committee
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Bill Summary · A 4871

Summary of New Jersey Bill A-4871 (Session 222)

Overview

  • Jurisdiction: New Jersey
  • Bill Number: A-4871
  • Session: 222
  • Principal Purpose: To authorize a gross income tax deduction for charitable contributions made to certain nonprofit entities that are supported by state funds or subsidies.

Intent and purpose

  • The bill aims to provide taxpayers with a deduction on their New Jersey gross income tax for charitable contributions made to specific nonprofit organizations that receive state funding or subsidies.
  • The underlying rationale is to encourage charitable giving to organizations that rely on public support, by enhancing the financial incentive for donors.

Key provisions

  • Tax Benefit: Establishes a gross income tax deduction for eligible charitable contributions.
  • Eligibility of Donees: Applies to nonprofit entities that are “supported by State funds or subsidies.” The precise classification and qualifying criteria for these organizations would be defined in the bill or accompanying statutes/regulations.
  • Deduction Mechanics: The bill creates a deduction against gross income, rather than a credit, meaning it reduces taxable income rather than directly reducing tax owed. The exact deduction amount, percentage, or cap (if any) is not specified in the summary provided and would be detailed in the bill’s text.
  • Limitations and Interactions: Any limitations (e.g., cumulative cap per taxpayer, carryforward provisions, or interaction with other deductions/credits) would be specified in the bill, but are not listed in the available information.

Who is affected

  • Taxpayers who itemize or claim deductions on the New Jersey gross income tax return would potentially benefit, subject to the deduction’s eligibility criteria.
  • Eligible charitable organizations receiving state funds or subsidies would likely see an impact on donor behavior, potentially increasing contributions from New Jersey residents.
  • Administrative impact would fall on the state tax department to implement and verify the deduction, including determining eligible donees and ensuring proper reporting on tax returns.

Procedural and timeline aspects

  • Introduced: May 4, 2026
  • Committee: Referred to the Assembly Commerce and Economic Development Committee
  • Sponsor: Co-sponsor Aura Dunn
  • The bill’s progress beyond referral is not provided in the current summary. If enacted, the effective date and any transition rules would be specified in the enacted text (e.g., effective for tax year revisions or in a future fiscal year).

Potential implications

  • Tax policy impact: Introduces or expands government-backed incentives for charitable giving, potentially increasing charitable contributions to state-supported nonprofits.
  • Budget considerations: If the deduction is widely used, it could reduce state tax revenue, depending on the deduction’s size and uptake.
  • Administrative considerations: Requires clear definitions for “nonprofit entities supported by State funds or subsidies” and robust administration to prevent fraud or misapplication.

If you’d like, I can integrate the exact statutory language and craft a side-by-side comparison with current law to highlight all changes and potential edge cases.

Compiled from official sources — confirm details with the bill’s official record.

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