Bill Text: NJ S1821 | 2026-2027 | Regular Session | Introduced
Bill Title: Allows gross income tax credits to certain renters whose rent exceeds 35 percent of gross income.
Sponsorship: Partisan Bill (Democrat 6)
Status: (Introduced) 2026-03-05 - Referred to Senate Budget and Appropriations Committee [S1821 Detail]
Download: New_Jersey-2026-S1821-Introduced.html
STATE OF NEW JERSEY
222nd LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
Allows gross income tax credits to certain renters whose rent exceeds 35 percent of gross income.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act allowing a gross income tax credit for certain rent payments, supplementing Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Except as otherwise provided in subsection b. of this section, a resident taxpayer with gross income not in excess of $60,000 in the taxable year, and who pays rent on the principal residence of the taxpayer in excess of 35 percent of the taxpayer's gross income, shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount determined in accordance with the following schedule:
(1) 100 percent of the excess rent paid by the taxpayer during the taxable year, not to exceed $1,000, if:
(a) the taxpayer's gross income for the taxable year does not exceed $50,000, and the taxpayer resides in a high-cost area; or
(b) the taxpayer's gross income for the taxable year does not exceed $25,000, and the taxpayer does not reside in a high-cost area;
(2) 75 percent of the excess rent paid by the taxpayer during the taxable year, not to exceed $1,000, if:
(a) the taxpayer's gross income for the taxable year exceeds $50,000 but does not exceed $60,000, and the taxpayer resides in a high-cost area; or
(b) the taxpayer's gross income for the taxable year exceeds $25,000 but does not exceed $50,000, and the taxpayer does not reside in a high-cost area; or
(3) 50 percent of the excess rent paid by the taxpayer during the taxable year, not to exceed $1,000, if the taxpayer's gross income for the taxable year exceeds $50,000 but does not exceed $60,000, and the taxpayer does not reside in a high-cost area.
b. In the case of a taxpayer who receives a State or federal tenant-based housing subsidy, and who otherwise qualifies for a tax credit pursuant to subsection a. of this section, the taxpayer shall be allowed a credit against the tax imposed under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in lieu of the amount authorized pursuant to subsection a. of this section, in an amount equal to 1/12 of the amount of unsubsidized rent paid by the taxpayer during the taxable year.
c. The amount of the credit allowed pursuant to this section shall be applied against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., after all other credits and payments. If the credit exceeds the amount of tax otherwise due, the amount of excess shall be treated as an overpayment for the purposes of N.J.S.54A:9-7, provided that subsection (f) of N.J.S.54A:9-7 shall not apply, and further provided that a taxpayer may elect to receive the overpayment in monthly installments during the taxable year immediately following the taxable year for which the credit is claimed.
d. As used in this section:
"Excess rent" means the portion of rent paid by a taxpayer for the taxpayer's principal residence during the taxable year that exceeds 35 percent of the taxpayer's gross income for the taxable year.
"High-cost area" means any location in the State in which the small area fair market rent is used to calculate the tenant-based housing subsidy provided to participants of the federal Housing Choice Voucher Program during the taxable year for which the credit is claimed.
2. If a taxpayer qualified for the credit allowed pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) in the taxable year immediately preceding the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the taxpayer shall file an amended tax return with the director within 90 days following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) to claim the credit or refund of any resulting overpayment of tax.
3. This act shall take effect immediately and shall apply retroactively to taxable years beginning on or after the taxable year immediately preceding the date of enactment.
STATEMENT
This bill would establish a refundable gross income tax credit for certain renters whose rent exceeds 35 percent of their gross income.
Under the bill, a taxpayer with gross income not in excess of $60,000, and who pays rent on the principal residence of the taxpayer in excess of 35 percent of the taxpayer's gross income, may be allowed a refundable gross income tax credit based on a percentage of the excess rent paid by the taxpayer during the taxable year, not to exceed $1,000. Under the bill, a taxpayer may elect to receive the refundable portion of the tax credit in monthly installments during the taxable year immediately following the taxable year for which the credit is claimed.
Specifically, the amount of the tax credit would be determined according to the following schedule:
(1) 100 percent of the excess rent, not to exceed $1,000, if: the taxpayer's gross income does not exceed $50,000 and the taxpayer resides in a high-cost area; or the taxpayer's gross income does not exceed $25,000 and the taxpayer does not reside in a high-cost area;
(2) 75 percent of the excess rent, not to exceed $1,000, if: the taxpayer's gross income exceeds $50,000 but does not exceed $60,000 and the taxpayer resides in a high-cost area; or the taxpayer's gross income exceeds $25,000 but does not exceed $50,000 and the taxpayer does not reside in a high-cost area; or
(3) 50 percent of the excess rent, not to exceed $1,000, if the taxpayer's gross income exceeds $50,000 but does not exceed $60,000, and the taxpayer does not reside in a high-cost area.
As used in the bill, the term "high-cost area" is defined as any location in the State in which the small area fair market rent is used to calculate the tenant-based housing subsidy provided to participants of the federal Housing Choice Voucher Program during the taxable year for which the credit is claimed.
The bill also provides that for any taxpayer who receives State or federal tenant-based housing subsidy, and who otherwise qualifies for the tax credit allowed under the bill, the taxpayer may instead elect to receive a tax credit in an amount equal to 1/12 of the unsubsidized rent paid by the taxpayer during the taxable year.
Additionally, the bill provides that the tax credit would be authorized retroactively, beginning on and after the taxable year immediately preceding the date of enactment of this bill. If a taxpayer qualified for the credit in the taxable year immediately preceding the date of enactment, the taxpayer would be required to file an amended tax return with the Director of the Division of Taxation within 90 days following the date of enactment to claim the credit or refund of any resulting overpayment of tax.
