Child Tax Credit May Increase In 2024 For NJ Parents: What To Know

NEW JERSEY - Some New Jersey taxpayers may be getting a larger child tax credit under a proposal passed in the House of Representatives last week.

Under the proposed measure, dubbed the Tax Relief for American Families and Workers Act of 2024, more lower-income families will be able to receive a larger tax credit. The benefits would increase the maximum credit per child to $1,800 in 2023, $1,900 in 2024 and $2,000 in 2025, plus inflation adjustments.

The $78 billion plan was passed by a vote of 357-70 and is now awaiting a Senate vote. Aside from the child tax credit expansion, the bill also proposes the restoration of several business tax breaks initially included in the Republican-backed 2017 Tax Cuts and Jobs Act.

The expanded Child Tax Credit expired in 2021, raising the tax credit to up to $3,600 per child (as of publication, the maximum is $2,000 per child). But unlike the pandemic-era expansion, New Jersey families won’t be getting monthly checks this time around. Instead, eligible families will have to wait until they file their tax return to claim child tax benefits.

Under the American Rescue Plan that temporarily expanded the Child Tax Credit for 2021, nearly four million children were lifted out of poverty and more than 61 million children benefitted overall, according to figures from Rep. Josh Gottheimer’s office. The plan helped cut child poverty nearly in half in the Garden State.

“Since its expiration, child poverty rates have skyrocketed, more than doubling the rate from a historic low of 5.2 percent in 2021 to 12.4 percent in 2022 — wiping out all the gains we made as a nation,” Gottheimer’s office said in a statement. “Across the nation, from 2019 to just this past October alone, the average cost of childcare is up 32 percent. Jersey was ranked the second most expensive state in the country for childcare last year, costing $442.19 per week on average.”

The proposed bipartisan package, which would go into effect during the 2024 tax year, would allow taxpayers to use their income from the current or prior year in calculating the credit. Eligible households who would benefit from the new measures would see an average tax cut of $680, according to estimates from the Tax Policy Center.

Children under 17 years of age by the end of 2024 with a social security number will be eligible for the child tax credit. You can check your eligibility here.

New Jersey lawmakers including Gottheimer, Rep. Chris Smith and Rep. Jeff Van Drew voted yes on the bill, as well as Rep. Bonnie Watson Coleman, Rep. Mike Sherrill, Rep. Donald Payne, Rep. Bill Pascrell, Rep. Robert Menendez and Rep. Andy Kim; Rep. Tom Kean Jr. voted no alongside Rep. Frank Pallone. Rep. Donald Norcross did not vote.

"Democrats have shown that the best way to lift kids out of poverty is by expanding the child tax credit," Pallone said in a statement via X. "I voted against the tax deal today because it falls short of what's needed to help lift low-income families out of poverty and gives lopsided benefits to corporations."