Sponsored by:
Senator EDWARD DURR
District 3 (Cumberland, Gloucester and Salem)
Senator STEVEN V. OROHO
District 24 (Morris, Sussex and Warren)
Senator KRISTIN M. CORRADO
District 40 (Bergen, Essex, Morris and Passaic)
Senator JAMES W. HOLZAPFEL
District 10 (Ocean)
Senator DECLAN J. O'SCANLON, JR.
District 13 (Monmouth)
Senator JOSEPH PENNACCHIO
District 26 (Essex, Morris and Passaic)
Senator HOLLY T. SCHEPISI
District 39 (Bergen and Passaic)
Senator ROBERT W. SINGER
District 30 (Monmouth and Ocean)
Senator MICHAEL L. TESTA, JR.
District 1 (Atlantic, Cape May and Cumberland)
Senator ANTHONY M. BUCCO
District 25 (Morris and Somerset)
SYNOPSIS
"Gas Price and Inflation Tax Credit Act."
CURRENT VERSION OF TEXT
As introduced.
An Act allowing a gross income tax credit for Tax Year 2021.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For Tax Year 2021, taxpayers who are married individuals filing a joint return and an individual filing as a head of household or as a surviving spouse with gross income of $250,000 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., in the amount of $500, and taxpayers who are married individuals filing separately or individuals filing as a single taxpayer with gross income of $125,000 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., in the amount of $250.
b. The amount of the credit allowed pursuant to this section shall be applied against the tax otherwise due under N.J.S.54A:1-1 et seq., after all other credits and payments. If the credit exceeds the amount of tax otherwise due, that amount of excess shall be an overpayment for the purposes of N.J.S.54A:9-7; provided however, that subsection (f) of N.J.S.54A:9-7 shall not apply.
c. If a taxpayer has already filed their Tax Year 2021 gross income tax return, the Director of the Division of Taxation shall credit the amount owed to the taxpayer pursuant to this section based on the taxpayer's filing status.
2. This act shall take effect immediately.
STATEMENT
This bill allows a tax credit against the gross income tax for Tax Year 2021 to help offset soaring gas prices and the worst inflation in 40 years.
The credit amount is $500 for married individuals filing a joint return and an individual filing as a head of household or as a surviving spouse with income of $250,000 or less, and $250 for individuals who are single or married and filing separately with income of $125,000 or less. The credit is refundable, meaning that any excess credit beyond the taxpayer's tax liability will be paid to the taxpayer in the form of tax refund.
Together with the tax credit proposed in Senate Bill No. 2243 of the 2022-2023 session, the sponsors intend to quickly prevent a projected $4.6 billion over-collection from taxpayers in the current State fiscal year. Current year tax over-collections are attributable to the worst inflation in 40 years and other factors causing taxpayers to pay more in taxes than budgeted or needed and it should be given back. Excess tax collections, if not prevented, will remain unused and unallocated in State accounts. Getting money back into the pockets of taxpayers will not only provide appropriate and immediate relief from soaring gas prices, over-taxation, and inflation, it will help increase economic activity and prevent the value of over-collections from eroding over time due to inflation.