New Jersey’s CPAs are concerned that student-loan debt is weighing down the state economy and want a new federal tax incentive to encourage businesses to help their employees meet their obligations.
John Reitmeyer, of NJ Spotlight, said CPAs are backing legislation in Congress that would provide a tax credit to encourage employers to help students pay down their debt. The bills, H.R.1043 in the House of Representatives and S.460 in the Senate, would allow employers to claim a tax credit for up to $5,250 in annual repayments per employee, the same benefit that’s currently permitted for employer tuition reimbursement.
“The New Jersey Society of Certified Public Accountants announced (Sept. 3) that it is urging members to contact the state’s delegation of federal lawmakers to rally support for pending legislation that would grant tax-exempt status to student-loan repayments made by an employer,” Reitmeyer writes.
NJBIA is supportive of the measure. Student debt and the cost of higher education are key factors that push college-age adults to leave New Jersey and contribute to our overall outmigration problem.
According to estimates from the New York Federal Reserve, more than 40 million people across the country have taken on a combined $1.6 trillion in student loans, including more than $106 billion borrowed in 2017 alone.
NJCPA’s CEO and Executive Director Ralph Albert Thomas said a survey by the organization indicated a majority of members believe that student-loan debt has reached “crisis levels” in New Jersey. Among other results, the survey also found that 80% of the group’s members said student loan debt was forcing clients to put off buying a home, and 79% said such debt was forcing clients to delay saving for retirement.
“We ask our members and their staff to please take the time to contact their representatives . . . to reiterate the benefit that this legislation would provide to all,” he said. “If the House bill collects 290 or more cosponsors, it could go to the House floor for consideration before year-end.”