NJ bill clarifies out-of-state deductions

NJ bill clarifies out-of-state deductions

Federations led charge in response to concerns from donors in Florida

State lawmakers passed legislation clarifying that donations to New Jersey-based charities can be deducted from state income taxes.

The measure also allows out-of-state residents to serve on boards of state charities without incurring tax consequences.

The Jewish Federation of Greater MetroWest NJ spearheaded support for the bill, responding to worries from out-of-state donors that previous state guidelines were vague or unclear.

“Those guidelines were not good enough for some of the professional financial advisers in the state of Florida,” who advised clients not to contribute to NJ charities, said Howard Rabner, COO/CFO of the federation. “This will put that concern to bed.”

The bill passed unanimously in both houses of the State Legislature and was signed into law June 27 by Gov. Chris Christie.

For Jewish federations and other nonprofits, much of the new law’s impact will be felt among former New Jerseyans who moved to Florida, which has no state income tax.

“Anybody who does not live in New Jersey who wants to give charity or tzedaka to any New Jersey charity will not have to pay any Jersey taxes,” said Max Kleinman, executive vice president/CEO of the Greater MetroWest federation. “That is a major achievement.”

“This may mean as much as a few hundred thousand dollars for Greater MetroWest alone,” said Jacob Toporek, executive director of the NJ State Association of Jewish Federations. “All of the other federations bought in.”

Toporek was one of the key lobbyists for the legislation.

“This legislation picked up steam from the beginning,” said Toporek. “It is budget-neutral and a way of building the capacity of nonprofits without costing the state any money.”

Joining the State Association and the Greater MetroWest federation as coalition partners were Rutgers University, NJ Center for Nonprofits, NJ Performing Arts Center, NJ Catholic Conference, National Council of Jewish Women State Policy Advocacy Network, the Newark Museum, Jewish Vocational Service of MetroWest, and Rutgers Hillel.

read more: