NJ S2405

Allows New Jersey taxpayers to deduct student loan interest payments from their gross income for state tax purposes, matching the federal deduction under Internal Revenue Code section 221

Maximum deduction is $2,500, with the deduction phasing out for taxpayers with modified adjusted gross income exceeding $70,000 (single) or $140,000 (joint filers)

Deduction is completely eliminated for taxpayers with modified adjusted gross income of $85,000 or more (single) or $170,000 or more (joint filers)

Married taxpayers must file jointly to claim the deduction, and the loan must have been incurred solely to pay qualified higher education expenses at eligible institutions

Takes effect immediately and applies to taxable years beginning on or after January 1 following enactment