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NJ A4739
Bill
Status
9/12/2024
Primary Sponsor
Aura Dunn
Click for details
AI Summary
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Amends NJBEST (New Jersey Better Educational Savings Trust) program to classify special rollovers from 529 college savings accounts to Roth IRAs as "qualified withdrawals," making them exempt from State income tax penalties
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Aligns State law with recent federal tax changes that allow 529-to-Roth IRA rollovers without federal tax liability, effective for taxable years beginning January 1, 2024
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Federal rollover conditions apply: 529 account must be open at least 15 years, Roth IRA must be in the designated beneficiary's name, rolled-over funds must have been deposited at least 5 years prior, and lifetime rollover limit is $35,000
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Excludes these special rollover distributions from gross income calculations for New Jersey income tax purposes
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Takes effect immediately and applies retroactively to taxable years beginning on or after January 1, 2024
Legislative Description
Allows distributions from NJBEST account to Roth IRA as qualified withdrawals and excludes such distributions from gross income tax.
Higher Education
Last Action
Introduced, Referred to Assembly Higher Education Committee
9/12/2024