What to Know
- New Jersey lawmakers and Gov. Phil Murphy announced an agreement on key middle-class tax relief and property tax relief measures in the Fiscal Year 2022 Budget
- Lawmakers contend that the agreement will make New Jersey -- a state known for its high property taxes -- more affordable for working families
- Senate President Steve Sweeney said the income tax rebate the "benefits will be spent in the local economy, generating jobs and business activity in communities across the state"
New Jersey lawmakers and Gov. Phil Murphy announced an agreement on key middle-class tax relief and property tax relief measures in the Fiscal Year 2022 Budget, including expanded tax relief for lower-income and senior homeowners as well as those with disabilities.
Lawmakers contend that the agreement will make New Jersey -- a state known for its high property taxes -- more affordable for working families.
"With these measures we’re building on the promise to make New Jersey more affordable and stand up for its working families and seniors,” New Jersey State Assembly Speaker Craig Coughlin said in a statement.
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Key tax relief components of the Fiscal Year 2022 Budget include, but are not limited to:
- Middle Class Tax Rebate: In Fiscal Year 2022, over 760,000 New Jersey families will receive an up to $500 tax rebate over the summer due to the Millionaires Tax enacted last fall. The estimated program cost is $319 million.
- Updating the Homestead Benefit Base Year to 2017: The Fiscal Year 2022 Appropriations Act will update Homestead Benefit payments so that they are based on 2017 property tax information, which is the most recent payment information available, instead of 2006 records. This change is estimated to increase the average benefit for seniors and homeowners with disabilities by over $130 and the average benefit for lower-income homeowners by $145. The estimated program cost is nearly $80 million.
- Child and Dependent Care Credit (CDCC) Expansion: This budget proposes expanding the CDCC enacted in 2018 so that it is both available for families making up to $150,000 and refundable. This change will benefit more than 80,000 additional families, and increase the average credit for those making under $30,000 to $277. The estimated cost is $17 million.
- Extending the Veterans Property Tax Deduction to Peacetime Veterans: The Appropriations Act will support the expanded deduction approved through the 2020 ballot measure. The estimated foregone revenue cost is $15 million.
- Expanding the Earned Income Tax Credit (EITC) Age of Eligibility of 21 to 18 and to Those Over Age 65: In Fiscal Year 2022, Governor Murphy and the Legislature will expand eligibility to those 65 and older without dependents and to those as young as 18, which is projected to help another 90,000 residents – roughly 70,000 over 65; and 20,000 between the ages of 18 and 21. The estimated foregone revenue cost is $13 million.
"Tax relief is a critical component of a stronger and fairer New Jersey,” Murphy said in a statement. “With each budget I have introduced, we have provided greater relief to those who need it most – through our continued expansion of the Earned Income Tax Credit, the establishment and expansion of a Child and Dependent Tax Care Credit, increased tax relief for veterans, middle-class tax rebates, and now the long-overdue expansion of the Homestead Benefit to make sure relief reflects reality. I’m proud to join with my partners in the Legislature to make sure that the best state to live in America is more affordable for families.”
State Senate President Steve Sweeney echoed similar sentiments saying the income tax rebate the "benefits will be spent in the local economy, generating jobs and business activity in communities across the state."
“This is direct tax relief to middle income families and senior citizens who need it most,” Sweeney said. “The income tax rebate will put money into the pockets of working families so they can support themselves and their children. The increased Homestead rebates will help ease the heavy property tax burden on middle-income homeowners. This extra assistance is especially important for senior citizens on fixed incomes so they can continue to live in their home communities.”