Bill Text: NJ A1216 | 2024-2025 | Regular Session | Introduced
Bill Title: Doubles amount of State child tax credit; raises age and income eligibility criteria needed to receive credit.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-01-09 - Introduced, Referred to Assembly Children, Families and Food Security Committee [A1216 Detail]
Download: New_Jersey-2024-A1216-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblywoman CAROL A. MURPHY
District 7 (Burlington)
SYNOPSIS
Doubles amount of State child tax credit; raises age and income eligibility criteria needed to receive credit.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act expanding 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] $150,000 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] 18 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:
If the taxable income is: The credit is:
$30,000 or under [$1,000] $2,000
[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]
over $30,000 but not over $50,000 $1,800
over $50,000 but not over $70,000 $1,600
over $70,000 but not over $90,000 $1,400
over $90,000 but not over $110,000 $1,200
over $110,000 but not over $130,000 $1,000
over $130,000 but not over $150,000 $800
The income limit 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 or after January 1, 2023.
STATEMENT
This bill would revise various aspects of the State child tax credit. Under current law, taxpayers with incomes of $80,000 or less and children under the age of six are eligible for an income tax credit of between $200 and $1,000 per child. The amount of the credit a taxpayer receives each year is based on the extent to which the taxpayer exceeds certain income thresholds. The credit amount gradually decreases as a taxpayer's income increases before being completely phased out once the taxpayer's income exceeds $80,000.
The bill would raise the age limit of an eligible child from under age six to under age 18, raise the income limit needed to qualify for the credit from $80,000 to $150,000, and increase the amount of the credit. The bill would also make changes to the income thresholds at which a reduction in the credit occurs and change the income intervals at which those reductions would occur. Currently, a reduction in the credit occurs for every $10,000 increase in income, with the exception of those taxpayers with incomes between $60,000 and $80,000. The bill would instead have reductions in the credit occur for every $20,000 of additional income earned in excess of $30,000 to allow taxpayers to continue claiming a higher credit. Taxpayers with incomes of less than $30,000 would have their credit amount doubled from $1,000 to $2,000 with corresponding credit reductions of $200 as a taxpayer's income approaches $150,000. Under the bill, the credit is completely phased out once a taxpayer's income exceeds $150,000. A summary of the bill's proposed income and credit amounts are as follows:
|
Proposed New Jersey Taxable Income Amount |
Proposed Credit Amount |
|
$30,000 or under |
$2,000 |
|
over $30,000 but not over $50,000 |
$1,800 |
|
over $50,000 but not over $70,000 |
$1,600 |
|
over $70,000 but not over $90,000 |
$1,400 |
|
over $90,000 but not over $110,000 |
$1,200 |
|
Over $110,000 but not over $130,000 |
$1,000 |
|
Over $130,000 but not over $150,000 |
$800 |
