LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 3416
STATE OF NEW JERSEY
221st LEGISLATURE
SUMMARY
DATED: JUNE 25, 2024
Synopsis: Provides gross income tax deduction to eligible educators and
paraprofessionals for expense of classroom supplies.
Type of Impact: Annual State revenue loss to the Property Tax Relief Fund.
Agencies Affected: Department of the Treasury.
Office of Legislative Services Estimate
Fiscal Impact Tax Year 2025 and Annually Thereafter
State Revenue Loss Between $1.3 million and $2.4 million
 The Office of Legislative Services (OLS) estimates that this bill would result in annual State
revenue losses of between $1.3 million and $2.4 million. The OLS primarily bases its estimate
on State taxpayers’ claims of the federal educator expense tax deduction from tax years 2016
through 2020.
BILL DESCRIPTION
This bill provides a State gross income tax deduction, not to exceed $250 for a taxable year, to
eligible educators and paraprofessionals working in a New Jersey elementary or secondary school
for unreimbursed expenses incurred by the educator or paraprofessional for classroom supplies.
An eligible educator is defined under the bill as an individual who is employed as a kindergarten
through grade 12 teacher, instructor, counselor, speech language specialist, or principal by a public
or private school for at least 900 hours during a school year. The bill defines a paraprofessional
as an individual who is employed as a school aide or classroom aide that assists a teaching staff
member with the supervision of pupil activities by a public or private school that provides
elementary education or secondary education. Classroom supplies are defined under the bill as
books, computer equipment, including related software and services, and other equipment,
supplies, and supplementary materials used by an eligible educator or paraprofessional in the
classroom.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that this bill would result in annual State revenue losses of between $1.3
million and $2.4 million. Since the tax deduction established under the bill is largely modeled off
of the federal educator expense tax deduction, the OLS bases its estimate on State taxpayers’
claims of the federal deduction from tax years 2016 through 2020. Over this timeframe, an eligible
educator was permitted to claim up to $250, or $500 if married filing jointly and both spouses are
eligible educators, of unreimbursed qualified expenses.
Using State-specific data from the Internal Revenue Service’s Statistics of Income from tax
years 2016 through 2020, the OLS calculates that an average of 146,502 taxpayers annually
claimed an average of $38.2 million through the federal educator expense deduction. Given that
eligibility for the tax deduction under the bill is more expansive than the federal deduction in that
it does not require paraprofessionals to work for at least 900 hours during a school year, the OLS
first assumes that an average of 150,000 taxpayers will claim the deduction. On top of this figure,
the OLS uses May 2022 State Occupational Employment and Wage Estimates from the United
States Bureau of Labor Statistics to project that 2,157 speech-language pathologists work in
elementary and secondary school settings in the State. In total, the OLS estimates that 152,157
taxpayers will annually claim the deduction under the bill.
Since the bill permits a maximum $250 deduction regardless of income tax filing status, the
OLS estimates that taxpayers would annually deduct a total of $38.0 million if the bill is enacted.
Assuming that most of these taxpayers will pay between a 3.5 percent and 6.37 percent marginal
tax rate, the annual revenue loss to the State would be between $1.3 million and $2.4 million. The
OLS notes that, while it is expected that the majority of eligible taxpayers will pay a marginal
income tax rate of between 3.5 percent and 6.37 percent, a certain level of taxpayers may be subject
to tax rates that are outside of this range.
Section: Revenue, Finance, and Appropriations
Analyst: Patrick Walsh
Assistant Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).