This bill proposes significant changes to the New Jersey child tax credit, effectively doubling the amount of the credit and expanding eligibility criteria. The income threshold for receiving the credit is raised from $80,000 to $150,000, and the age limit for eligible children is increased from under six years to under 18 years. The credit amount for taxpayers with incomes of $30,000 or less will increase from $1,000 to $2,000, while the credit will gradually decrease for incomes above this threshold, with reductions occurring for every $20,000 of additional income rather than the previous $10,000 increments. The credit will be completely phased out for taxpayers with incomes exceeding $150,000.

Additionally, the bill includes provisions that allow taxpayers to claim the credit regardless of whether they use a Social Security number or an Individual Taxpayer Identification Number. It also stipulates that any excess credit beyond the tax owed will be treated as a refundable overpayment. The Division of Taxation is tasked with reporting data on the number of taxpayers claiming the credit, their income levels, and the average credit amount. The changes outlined in the bill are set to take effect for taxable years beginning on or after January 1, 2026.

Statutes affected:
Introduced: 54A:4-17.1