Bill Text: NJ AR93 | 2024-2025 | Regular Session | Introduced
Bill Title: Urges President and Congress to enact legislation permanently reinstating federal child tax credit as provided for in tax year 2021.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2024-01-09 - Introduced, Referred to Assembly Children, Families and Food Security Committee [AR93 Detail]
Download: New_Jersey-2024-AR93-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
Urges President and Congress to enact legislation permanently reinstating federal child tax credit as provided for in tax year 2021.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Assembly Resolution urging the President and Congress of the United States to enact legislation reinstating the amount of the federal child income tax credit as provided for in tax year 2021 on a permanent basis.
Whereas, The birth of a child is a joyous occasion that begins a new and exciting chapter for countless families across the country; and
Whereas, At the same time, many come to realize that the decision to expand their family also comes with a significant increase in household costs; and
Whereas, Recent studies have found that the average annual cost of providing for a child in the United States is $20,813 with New Jersey residents paying anywhere from $2,000 to $11,000 more in childcare, food, and housing costs; and
Whereas, This means that by the time a child reaches age 17, families will have incurred an average of over $300,000 in expenditures for their children; and
Whereas, When factoring in costs families take on after age 17 to help their children transition into adulthood, such as paying for a college education, assisting with housing, food and transportation, or providing direct cash assistance, child-related expenditures continue to climb; and
Whereas, High levels of inflation have only made it more difficult for families to raise a child and ensure that their household is financially secure; and
Whereas, To help ease the financial burden that families face when raising children, the federal government established the child tax credit, which currently allows an eligible taxpayer to reduce their federal income tax liability by up to $2,000 per eligible child up to 16 years of age; and
Whereas, The "American Rescue Plan Act" passed by Congress in 2021 temporarily increased the maximum age for an eligible child from 16 to 17 years of age. The law also temporarily increased the maximum amount of the credit from $2,000 to $3,600 for taxpayers with children under age 6 and from $2,000 to $3,000 for taxpayers with children ages 6 to 17; and
Whereas, However, these changes only applied to tax year 2021 which means that for tax year 2022, taxpayers with qualifying children experienced a reduction in the credit of between $1,000 and $1,600, depending on the age of their child, and one less year to claim the credit with the age of a qualifying child reduced from 17 to 16 years of age; and
Whereas, It is estimated that, in just the one year that the federal child tax credit was increased and expanded, the child poverty rate reached a record low of 5.2 percent, lifted 2.9 million children out of poverty, and reduced the number of children living near the poverty line by one-third; and
Whereas, While changes made to the federal child tax credit for tax year 2021 were effective in reducing child poverty rates, proposals to restore the 2021 credit amounts have failed to receive congressional approval with another credit reduction due to occur at the end of tax year 2025; and
Whereas, If the President and Congress do not act before that time, the credit will be cut in half and return to the $1,000 amount it was set at prior to passage of the "Tax Cuts and Jobs Act" in 2017; and
Whereas, Recently, a bipartisan group of lawmakers in the United States House of Representatives are planning to convene a subcommittee to work on issues related to the federal child tax credit in an attempt to build consensus around measures that could be paired with an increase in the credit; and
Whereas, Disagreements in Congress regarding an increase in the credit have centered around the imposition of work requirements and the costs of an expansion; and
Whereas, Both the President and Congress should make every effort to come to a consensus on reinstating the amount of the federal child tax credit to 2021 levels to ensure that families continue to receive sufficient financial support as they raise their children; now, therefore,
Be It Resolved by the General Assembly of the State of New Jersey:
1. The President and Congress of the United States are urged to enact legislation permanently reinstating the amount of the federal child income tax credit for tax year 2021 to allow taxpayers to claim a $3,000 credit for each qualifying child under age 17, and a $3,600 credit for taxpayers with children under age six beginning with tax year 2025.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly to the President of the United States, the Majority and Minority Leaders of the United States Senate, the Speaker and Minority Leader of the United States House of Representatives, and every member of New Jersey's congressional delegation.
STATEMENT
This resolution urges the President and Congress of the United States to enact legislation permanently reinstating the amount of the federal child income tax credit as provided for in tax year 2021. Doing so would allow eligible taxpayers to claim a $3,000 credit for each qualifying child under age 17 and a $3,600 credit for each qualifying child under age six. While the birth of a child is a joyous occasion, the decision to expand one's family comes with a significant increase in household costs. Recent studies have found that the average annual cost of providing for a child in the United States is $20,813 with New Jersey residents paying anywhere from $2,000 to $11,000 more in childcare, food, and housing costs. High levels of inflation have only made it more difficult for families to raise a child and ensure that their household is financially secure.
To help ease the financial burden that families face when raising children, the federal government established the child tax credit, which currently allows an eligible taxpayer to reduce their federal income tax liability by up to $2,000 per eligible child up to 16 years of age. The "American Rescue Plan Act" passed by Congress in 2021 temporarily increased the maximum age for an eligible child from 16 to 17 years of age while also increasing the amount of the credit from $2,000 to $3,600 for taxpayers with children under age 6 and from $2,000 to $3,000 for taxpayers with children ages 6 to 17. However, these changes only applied to tax year 2021 which means that for tax year 2022, taxpayers with qualifying children experienced a reduction in the credit of between $1,000 and $1,600, depending on the age of their child, and one less year to claim the credit with the age of a qualifying child reduced from 17 to 16 years of age.
Despite evidence that the expansion of the federal child tax credit in 2021 helped to reduce child poverty, proposals to restore the 2021 credit amounts have failed to receive approval with another credit reduction due to occur at the end of tax year 2025. If the President and Congress do not act before that time, the credit will be cut in half and return to the $1,000 amount it was set at prior to passage of the "Tax Cuts and Jobs Act" in 2017.
Recently, a bipartisan group of lawmakers in the United States House of Representatives are planning to convene a subcommittee to work on issues related to the federal child tax credit in an attempt to build consensus around measures that could be paired with an increase in the credit. Disagreements in Congress regarding an increase in the credit have centered around the imposition of work requirements and the costs of an expansion. In light of this impasse, both the President and Congress should make every effort to come to a consensus on reinstating the amount of the federal child tax credit to tax year 2021 levels to ensure that families continue to receive sufficient financial support for tax year 2025 and beyond.
