Bill Text: NJ A3249 | 2024-2025 | Regular Session | Introduced
Bill Title: Increases amount of State child tax credit and revises income and age eligibility criteria.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2024-01-09 - Introduced, Referred to Assembly Children, Families and Food Security Committee [A3249 Detail]
Download: New_Jersey-2024-A3249-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblywoman AURA K. DUNN
District 25 (Morris and Passaic)
SYNOPSIS
Increases amount of State child tax credit and revises income and age eligibility criteria.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning the State child tax credit and amending P.L.2022, c.24.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.2022, c.24 (C.54A:4-17.1) is amended to read as follows:
1. a. A resident taxpayer with New Jersey taxable income of [$80,000] $100,000 or less shall be allowed a credit against the tax otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. for each child who has not attained the age of [six] 12 years as of the close of the taxable year and for which the taxpayer is allowed a deduction under N.J.S.54A:3-1.
The credit shall be in the following amounts for each child that has not attained the age of six years:
If the taxable income is: The credit is:
[$30,000 or under $1,000
over $30,000 but not over $40,000 $800
over $40,000 but not over $50,000 $600
over $50,000 but not over $60,000 $400
over $60,000 but not over $80,000 $200]
$50,000 or under $2,600
over $50,000 but not over $60,000 $2,400
over $60,000 but not over $70,000 $2,200
over $70,000 but not over $80,000 $2,000
over $80,000 but not over $100,000 $1,800
The credit shall be in the following amounts for each child that has attained the age of six years but has not attained the age of 12 years:
If the taxable income is: The credit is:
$50,000 or under $2,000
over $50,000 but not over $60,000 $1,800
over $60,000 but not over $70,000 $1,600
over $70,000 but not over $80,000 $1,400
over $80,000 but not over $100,000 $1,200
The income [limit] limits set forth in this section shall apply to taxpayers of any filing status.
b. A taxpayer shall be allowed the credit pursuant to this section whether the taxpayer uses a Social Security number or an Individual Taxpayer Identification Number on their tax forms.
c. If the amount of the credit allowed pursuant to this section exceeds the amount of tax otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., after all other credits and deductions, the amount of excess shall be treated as a refundable overpayment.
d. To qualify for the credit allowed pursuant to this section, a taxpayer shall file a joint return if the taxpayer is married, except for a taxpayer who files as a head of household or surviving spouse for federal income tax purposes for the taxable year.
e. In the case of a part-year resident, the amount of the credit allowed pursuant to this section shall be pro-rated, based upon that proportion which the total number of months of the taxpayer's residency in the taxable year bears to 12 in that period. For this purpose, 15 days or more shall constitute a month.
f. Any tax credit pursuant to this section shall not be taken into account as income for purposes of determining the eligibility of an individual for benefits or assistance or the amount or extent of benefits or assistance under any State program and, to the extent permitted by federal law, under any State program financed in whole or in part with federal funds.
g. The Division of Taxation shall issue data as part of the annual tax expenditure report, as required by section 1 of P.L.2009, c.189 (C.52:27B-20a) to include the number of taxpayers claiming the New Jersey Child Tax Credit, as well as claimants' income, the number of children benefitting, and the average credit amount per child and per claimant.
(cf: P.L.2023, c.72, s.1)
2. This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2023.
STATEMENT
This bill would increase the amount of the State child tax credit while also revising the credit's income and age eligibility criteria. Under current law, a resident taxpayer with New Jersey taxable income of $80,000 or less is allowed a credit against the State income tax for each child under age six. The amount of the credit starts at $1,000 and is incrementally reduced as income thresholds are exceeded. The credit is completely phased out once a taxpayer's income exceeds $80,000.
Beginning in tax year 2023, the bill would increase the credit by $1,600 for taxpayers with children under age six and provide a credit between $1,200 and $2,000 to taxpayers with children ages six to 11. The bill would also raise the income limit at which the credit is completely phased out from $80,000 to $100,000 and make corresponding adjustments to the income thresholds in which reductions of the credit occur to reflect this increase.
By enacting these changes to the State's child tax credit, a temporary increase in the federal child tax credit will be restored and made permanent at the State level for middle class taxpayers. As part of the federal "American Rescue Plan Act of 2021," Pub.L.117-2, the age limit for the child tax credit was raised from 16 to 17 and the amount of the credit was increased from $2,000 to $3,600 for taxpayers with children under age six. The credit was also increased from $2,000 to $3,000 for taxpayers with children ages six to 17. However, these changes only applied to tax year 2021, meaning that for tax year 2022, taxpayers experienced a reduction in the credit of between $1,000 and $1,600, depending on the age of their children, and one year less to claim the credit with the age of a qualifying child reduced from 17 to 16 years of age. For these reasons, it is critical for the State to step in and provide this much needed relief, particularly given the high levels of inflation.
