Establishes New Jersey Child Tax Credit program to benefit certain low-income households.
If this bill is enacted, it will have significant implications for state tax law. The New Jersey Child Tax Credit will be available to taxpayers regardless of whether they possess a Social Security number or an Individual Taxpayer Identification Number. This inclusive eligibility is intended to ensure that more families can access the financial benefits that the credit provides, potentially reducing child poverty rates in the state. Furthermore, the credit shall not be considered income when determining eligibility for other state benefits, thereby avoiding any detrimental impact on those who may be receiving assistance.
Assembly Bill A336 seeks to establish a New Jersey Child Tax Credit program designed to assist certain low-income households by offering a refundable gross income tax credit. The bill aims to provide financial relief to families with dependent children whose annual income does not exceed 250 percent of the federal poverty level. Specifically, the credit amount is set at $582 for each qualified younger child under the age of six and $187 for qualified older children up to age 25 for families at or below the federal poverty level. As income rises above this threshold, the credit gradually decreases.
However, there may be points of contention surrounding the bill, particularly in relation to its retroactive application for taxable years ending on or after the bill's effective date. Critics could argue that retroactive tax credits complicate fiscal planning for the state and could strain the budget. Another contentious topic may relate to the definition of 'qualified children', as changes in tax credits can lead to debates about the criteria and income levels set forth, especially concerning how they align with current standards of living and inflation.
The bill is currently pending technical review by the Legislative Counsel, indicating that further evaluation is essential before any formal debate or voting can occur in the legislature.