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A 4777

Requires State to participate in federal tax credit scholarship program and directs Commissioner of Education to provide required information to U.S. Secretary of the Treasury.

2026-2027 Regular Session Introduced by Dawn Fantasia and 3 co-sponsors

New Jersey must participate in and report annually on the federal tax credit program for contributions to NJ-based SGOs, enabling residents to claim up to $1,700 credits.

Introduced, Referred to Assembly Education Committee
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Bill Summary · A 4777

Summary of Bill A-4777 (New Jersey, 222nd Legislature)

Basic purpose

  • This bill requires New Jersey to elect to participate in the federal tax credit program for contributions to scholarship granting organizations (SGOs) under Section 25F of the Internal Revenue Code (IRC).
  • It also directs the New Jersey Commissioner of Education to annually provide the information required by federal law to the U.S. Secretary of the Treasury to support the state's participation.

Key provisions

  1. State participation in federal program

    • The State of New Jersey shall participate in the federal tax credit program for individual contributions to SGOs for all taxable years beginning after December 31, 2026.
    • Participation is voluntary at the state level each year, but the bill mandates that New Jersey participate for years after 2026.

  2. Annual reporting to the federal government

    • The Commissioner of Education must annually supply the United States Secretary of the Treasury with information required under Section 25F of the IRC.
    • The information includes, among other items, a list of all SGOs located in New Jersey that meet IRC Section 25F requirements.

  3. Scope of required information

    • The annual reporting includes listing all NJ-based SGOs that satisfy the Section 25F criteria, enabling the federal program’s operation within the state.

  4. Effective date

    • The act takes effect immediately upon enactment.

Substantive background (from the bill’s statement)

  • The federal program (often referred to as part of the “One Big Beautiful Bill Act” or Pub. L. 119-21) provides a federal income tax credit for individuals who contribute to SGOs.
  • Taxpayers can claim a credit equal to the aggregate amount of qualified contributions, up to $1,700 per taxable year, to SGOs funding scholarships for students in households with income up to 300% of the area median gross income.
  • States elect participation annually; if a state does not participate, residents may still receive credits for contributions to SGOs in participating states but not for SGOs located in their own state.

Who/what is affected

  • State government: Obligated to elect and participate in the federal program annually beginning after 2026.
  • Commissioner of Education: Responsible for compiling and submitting annual data required by federal law (including the NJ-based SGOs that meet IRC 25F criteria).
  • Scholarship granting organizations (SGOs) in New Jersey: Must meet the federal IRC 25F requirements and will be part of the annual federal list provided to the Treasury.
  • New Jersey taxpayers: Potential eligibility for federal tax credits for qualifying contributions to SGOs, contingent on state participation and individual eligibility (up to $1,700 per year, income-eligible households).

Timelines and procedural notes

  • Effective date: Immediate (upon enactment).
  • Annual actions: The state and the Education Commissioner must participate and report each year for the program to operate in New Jersey.
  • Post-2026 trigger: The first taxable years affected are those beginning after December 31, 2026.

Practical implications

  • If New Jersey participates as required, residents who contribute to NJ-based SGOs could claim a federal tax credit (up to $1,700 per year) for scholarships funding students in eligible income households.
  • The state must maintain up-to-date lists of qualifying NJ SGOs and share them with the U.S. Treasury annually.

Note: The bill does not specify funding, administrative costs, or changes to state education funding beyond the participation and reporting requirements.

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

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