Organ Donation Tax Credits: A Life or Death Proposal?

TAX FOUNDATION | Kari Jahnsen

In early March, a rather unusual pair of bills landed in the New Jersey Assembly. If enacted, these bills would make New Jersey the first state in the country to provide a “no strings attached” tax credit for providing blood or organ donations. The bills, A4664 and A4665, provide:
  • A $100 state income tax credit to anyone who donates blood, platelets, or plasma four or more times in a taxable year;
  • A $1,000 state income tax credit to a resident who donates a part of their liver, lung, kidney, or some amount of bone marrow; and
  • A $1,000 state income tax credit to a deceased resident who was a registered organ donor whose organs were used in a human transplant. The refund would be applied to the decedent’s income tax for the last year of their life.
Tax credits directly reduce the amount of tax paid by the donor dollar-for-dollar, while a tax deduction reduces the amount of taxable income. Hence, a $1,000 credit has a much greater impact than a $1,000 deduction on the net amount of tax paid. Continue reading
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