Bill Text: NJ S804 | 2024-2025 | Regular Session | Introduced
Bill Title: "New Jersey Disability Savings Act."
Spectrum: Bipartisan Bill
Status: (Introduced) 2024-01-09 - Introduced in the Senate, Referred to Senate Health, Human Services and Senior Citizens Committee [S804 Detail]
Download: New_Jersey-2024-S804-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator ANTHONY M. BUCCO
District 25 (Morris and Passaic)
Senator JAMES BEACH
District 6 (Burlington and Camden)
SYNOPSIS
"New Jersey Disability Savings Act."
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning tax deductions for certain disability expenses and supplementing Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "New Jersey Disability Savings Act."
2. As used in this act:
"Department" means the Department of Human Services.
"New Jersey ABLE account" means an account established pursuant to P.L.2015, c.185 (C.52:18A-250 et al.).
"Qualifying state ABLE account" means an account established pursuant to any qualified state ABLE program, pursuant to section 529A of the federal Internal Revenue Code of 1986, 26 U.S.C. s.529A.
3. a. Subject to the availability of State appropriations, a New Jersey ABLE account or a qualifying state ABLE account, when initially opened by a taxpayer with a gross income of $150,000 or less, shall be eligible for a one-time grant of up to $750 in a dollar-for-dollar match of the initial deposit to the account.
b. For the purposes of this section, the department shall develop a methodology by which the department shall ensure that duplicate grants are not issued to a taxpayer for the same pool of savings in a New Jersey ABLE account or a qualifying state ABLE account.
c. If the annual State Appropriations Act does not include sufficient funding for the department to issue the grants in the amounts specified under this section, the department shall determine the methodology for allocating the available funding, which may include, but shall not be limited to, reducing the amount of the grant award for individual taxpayers.
d. Notwithstanding the
provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1
et seq.) to the contrary, the department may adopt, immediately upon filing
with the Office of Administrative Law, rules that the department deems
necessary for the appropriate administration and implementation of the
provisions of this section, including a minimum length of time for
participation in the New Jersey ABLE program or other qualifying state ABLE
program for the credits established pursuant to this section, which rules shall
be effective for a period not to exceed 365 days from the date of filing. The
department shall thereafter amend, adopt, or readopt the rules in accordance
with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).
4. A taxpayer shall be allowed a deduction from the taxpayer's gross income for the taxable year in the amount of the taxpayer's contribution for the taxable year to a New Jersey ABLE account or qualifying state ABLE account.
5. This act shall take effect immediately.
STATEMENT
This bill expands the "New Jersey Achieving a Better Life Experience (ABLE) Program," P.L.2015, c.185 (C.52:18A-250 et al.) to incentivize qualified individuals with disabilities and their families to save for disability-related expenses in tax-advantaged savings accounts, known as ABLE accounts. Pursuant to current federal statute, qualified individuals who have significant disabilities with onset prior to age 26 years, and who receive Supplemental Security Income or Social Security Disability Insurance benefits, may contribute as much as the federal gift tax limit, or $16,000 in 2022, to a qualifying ABLE account. Individuals with disabilities, or their parent or guardian, may open an ABLE account in the individual's state of residence, or in another state. As of January 2022, there are 49 ABLE plans operating nationwide.
Funds deposited into an ABLE account may only be used for qualifying disability-related expenses such as transportation, housing, education, assistive technology, legal fees, and personal support services. Distributions from a New Jersey ABLE account are not subject to federal tax, provided the distributions do not exceed the individual's disability-related expenses for the year.
New Jersey statute currently limits total lifetime contributions to an ABLE account to $305,000. Once the value of an ABLE account exceeds $100,000, SSI cash benefits for the ABLE account owner are suspended until the account's value falls below this threshold. However, a qualifying individual will not lose Medicaid benefits, no matter the balance in an ABLE account.
Pursuant to the bill, all contributions to a qualifying New Jersey ABLE account are fully-deductible on a New Jersey State tax return, similar to qualifying contributions to the State's Section 529 educational savings program, known as the NJBEST. As amended, the bill additionally incentivizes taxpayer savings in New Jersey ABLE accounts by providing up to $750 in dollar-for-dollar matching funds for taxpayers whose gross annual income equals $150,000 or less, and who deposit funds into a newly opened ABLE account. It is important to note, however, that the savings incentives instituted under this bill are subject to the annual appropriations process. Therefore, the bill authorizes the Department of Human Services to select a methodology for allocating these incentive funds in years in which State appropriations for these incentive payments are insufficient to fulfill the provisions of the bill.
