So for NJ my understanding is
The tax benefit are:
(1) that the money grows tax free
(from both federal and state).
(2) While contributions used to be after-tax (and withdrawals are tax free), as of 2022, for households with AGI up to $200K there is a NJ state tax deduction on first $10,000 of contributions per year
(per household?) (3) For household with AGI of less than $75,000, the state has a matching grant of $750, subject to available funding.
(Is this one-time per household? Or per account? or per year?)Key features include:
--Can be used immediately following deposit (to pay current tuition bills)
--Can be used for K-12 (elementary school)
--Can be used for most beis medrash / seminary out of state schools that are accredited (I.e. that offer college credits in US)
--Can be used to pay up to $10,000 of student loans
--first $25,000 is ignored in NJ FAFSA
(Does this apply to federal FAFSA too?)
--Can easily switch beneficiaries to (siblings, grandchildren, nieces, nephews, cousins, spouse)
--investment options include about a dozen mutual fund type options that can be combined to create a well-rounded portfolio of equity/fixed-income/international/money market, or a target-date-based asset allocations
Sources:
https://www.njbest.com/why-njbest/njbest-benefitshttps://www.njbest.com/products/investment-options#build-your-own-portfoliohttps://www.nj.gov/treasury/taxation/individuals/collegededuction.shtmlSeems like
--anyone with (1) AGI <$75K, could
benefit $750 just by contributing $750,
and/or
--anyone with (1) AGI <$200K, and (2) paying NJ state taxes, (3) paying tuition (K-12 or post-high school) and (4) some cash available, could
benefit by up to $637 in NJ state tax savings, by contributing $10,000, for immediate tuition use.
That said, NJ tax rates are progressive, so this tax benefit is more valuable for those making over $80K, that are paying 5.5%+ in state tax (which would result in $550 of annual tax savings on a $10,000 contribution) (vs 1.4%-3.5% tax rate or less on first 80K - which is a savings of up to $140-$350 annually).
Did I get all these details correct? Please advise of any errors.