NJ Child Tax Credit Coming 1 Year Sooner Than Expected: Murphy

NEW JERSEY - Tax credits for New Jersey families who make under a certain income threshold set to be made available by 2024 will now be available by next year, Gov. Phil Murphy said.

Murphy made the schedule change by signing bill S-3046/A-4640 this week, which amended dates in a previously signed piece of legislation regarding the $18 million child tax credit program.

“Making New Jersey more affordable for our families has been one of my highest priorities since day one,” Murphy said in a statement. “Tax relief is critically important and this amendment will put money into the pockets of families as early as next year. I look forward to our continued progress in making New Jersey stronger, fairer, and more affordable for all of our residents.”

The tax program, unveiled initially in January 2022, is available to New Jersey taxpayers with incomes of up to $80,000 on a sliding-scale basis:

• Resident households with an income of $30,000 or less will receive a refundable gross income tax credit of $500 for each child
• Resident households with an income of $30,000 to $40,000 will receive a refundable gross income tax credit of $400 for each child
• Resident households with an income of $40,000 to $50,000 will receive a refundable gross income tax credit of $300 for each child
• Resident households with an income of $50,000 to $60,000 will receive a refundable gross income tax credit of $200 for each child
• Resident households with an income of $60,000 to $80,000 will receive a refundable gross income tax credit of $100 for each child

“As we work to make New Jersey more affordable, one of the best and most meaningful investments we can make is into our working families,” said Assembly Speaker Craig J. Coughlin. “With a new state child tax credit being delivered as intended – directly and this year – New Jersey families can rest assured that the relief they need, at a time when rising costs have stretched budgets, will be there.”

Read more: $415M In Child Tax Credit Unclaimed By NJ Families: Report

New Jersey’s legislation is similar to the expanded federal child tax credit, which was established as part of the American Rescue Plan Act of 2021 — a federal coronavirus relief package signed into law last year —but has not been renewed. The law increased to a tax credit of $3,600/$3,000 per eligible child for single filers with incomes less than $75,000, unmarried joint filers with incomes below $112,500 and married joint filers with incomes under $150,000.

The credit phases down to $2,000 above the aforementioned income levels up until $200,000 for single filers and unmarried heads of households and $400,000 for married joint filers. Then it phases down to $0.

The expanded credit expired in December after Congress failed to pass the Build Back Better Act, which would have extended the setup for an additional year.

“Working class families need help right now to keep up with rising costs, and this law will make sure the new Child Tax Credit provides immediate relief," said Peter Chen, Senior Policy Analyst at New Jersey Policy Perspective (NJPP). "Modeled off of the highly successful federal credit, this program will make the state a more affordable place to start and grow a family, especially for those with the lowest incomes. We look forward to working with the Murphy administration and lawmakers on ways to build on this credit in future years so New Jersey remains the best state to raise a child.”

With reporting by Josh Bakan.