$500 tax rebates: which New Jersey residents will receive the money?
New Jersey is set to pass 2022 state budget that will send over three quarters of a million middle-class families in the state a $500 tax rebate in July.
The New Jersey Democrat-led Senate passed a $46.4 billion state budget for the 2022 fiscal year along party lines. Included in the numerous middle-class tax relief measures is a $500 middle-class tax rebate that Governor Phil Murphy and lawmakers agreed to in September.
The budget fight was made easier with the state’s $10 billion windfall from sales tax collections and $6 billion in funds from the American Rescue Plan. The rebate checks to middle-class families will come from proceeds of the Millionaires Tax the state enacted in September.
Who will receive New Jersey $500 middle-class tax rebate?
Under the Millionaires Tax legislation from last fall, the top New Jersey tax rate of 10.75 percent kicked in for those earning over $1 million dropping from $5 million threshold. The tax increase is predicted to raise between $390 million to $450 million a year once fully implemented of which $300 million will go toward tax rebates for the middle class.
Families making up to $150,000 or those filing individually who earn up to $75,000 will receive checks for up to $500. Filers must have at least one dependent child in order to qualify for the payment. This year’s handout will cost the state $319 million and around 760,000 New Jersey families will benefit.
The legislation is set to be voted on in the Democrat-led New Jersey General Assembly on Thursday. Governor Phil Murphy who has been working with lawmakers is expected to sign the bill when it arrives at his desk. The checks should go out starting in July and over the summer.
“This is cash on the barrel, and the millionaires tax – the so-called millionaires tax - that's going to be directly into checks that families up and down this state in the middle class, and those aspiring to get into the middle class, are going to receive,” Governor Phil Murphy said.
Other tax benefits in the New Jersey 2022 budget
In addition to the $500 tax rebate, middle-class residents can look forward to other tax benefits. New Jersey will update Homestead Benefit payments, basing them on the most recent property tax information from 2017, instead of 2006. This will put more money in the pockets of seniors, disabled and lower-income homeowners. The 2022 budget will support extending the Veterans Property Tax Deduction, expanded in 2020 by a ballot measure, to Peacetime Veterans.
The 2022 Appropriations Act proposes expanding the Child and Dependent Care Credit to families earning up to $150,000 while at the same time making it refundable. As well the Earned Income Tax Credit will increase from 35 percent to 40 percent. Also, the eligibility age will drop once more this year from 21 to 18, and expand eligibility to those 65 and older.
“We are making use of available resources to deliver tax relief to middle class families and working people. We are expanding the tax credits for families, rebates for homeowners, deductions for veterans, and increased savings for the working poor. It also will make college and retirement more affordable for low- and middle-income residents,” Senator Paul Sarlo, chairman of the Senate Budget and Appropriations Committee said.