Increases amount of State child tax credit and revises income and age eligibility criteria.
The proposed changes to the child tax credit are expected to provide much-needed financial relief to middle-class families, particularly in light of rising inflation. The bill also aims to restore the temporary increase in federal child tax credits that occurred under the 'American Rescue Plan Act of 2021.' By reinstating these benefits at the state level, A3249 seeks to ease the financial burden on families, especially those with young children. The updated income parameters and age limits are significant modifications to current legislation, which may result in broader access and increased benefits for eligible families.
Assembly Bill A3249 aims to modify the State's child tax credit by increasing its amount and revising both income and age eligibility criteria. Under existing legislation, families with a New Jersey taxable income of up to $80,000 qualify for a credit against state income taxes for children under six years of age. This bill proposes to raise the credit significantly, with an increase to $1,600 for taxpayers with children under age six, whilst introducing credits of between $1,200 and $2,000 for children aged six to eleven. Additionally, it would adjust the income threshold at which the credit phases out, raising it from $80,000 to $100,000.
Debate surrounding A3249 may center on the funding implications of these increased tax credits and the potential impact on state revenues. Critics could express concerns regarding the long-term sustainability of the proposed benefits, as elevated credits for a wider range of incomes might create financial strain on state resources. Conversely, supporters are likely to advocate for the necessity of such relief efforts, emphasizing the importance of supporting families during economically challenging times. The discussion may also delve into whether these changes would sufficiently address the needs of the most vulnerable populations.