$500 Rebate Checks Coming For NJ Residents: What We Know

NEW JERSEY — As part of a $319 million package that Gov. Phil Murphy and lawmakers agreed to in September, about 800,000 Garden State residents could receive a $500 rebate check within a few weeks. And there is more aid on the way.

Murphy, Senate President Sweeney, Speaker Coughlin, Senate Budget Chair Sarlo, and Assembly Budget Chair Pintor Marin reached an agreement on middle-class tax relief and property tax relief measures in the Fiscal Year 2022 Budget, set to be adopted by July 1.

The deal includes a $500 rebate to married parents filing a joint tax return or who identify as head of household or as a surviving spouse. The parents must have at least one child and earn a maximum of $150,000. The rebate threshold is $75,000 for single parents or each parent who files separate returns. The parent must have a gross income tax liability greater than zero.

“Tax relief is a critical component of a stronger and fairer New Jersey,” Murphy said. “With each budget I have introduced, we have provided greater relief to those who need it most – through our continued expansion of the Earned Income Tax Credit, the establishment and expansion of a Child and Dependent Tax Care Credit, increased tax relief for veterans, middle-class tax rebates, and now the long-overdue expansion of the Homestead Benefit to make sure relief reflects reality. I’m proud to join with my partners in the Legislature to make sure that the best state to live in America is more affordable for families.”

Tax relief components of the Fiscal Year 2022 Budget include, but are not limited to:

• Middle Class Tax Rebate: In Fiscal Year 2022, over 760,000 New Jersey families will receive an up to $500 tax rebate due to the Millionaires Tax enacted by the Governor and the Legislature last fall. Families will receive these rebates over the summer. The estimated program cost is $319 million.
• Updating the Homestead Benefit Base Year to 2017: The Fiscal Year 2022 Appropriations Act will update Homestead Benefit payments so that they are based on 2017 property tax information, which is the most recent payment information available, instead of 2006 records. This change is estimated to increase the average benefit for seniors and disabled homeowners by over $130 and the average benefit for lower-income homeowners by $145. The estimated program cost is nearly $80 million.
• Child and Dependent Care Credit (CDCC) Expansion: This budget proposes expanding the CDCC that the Governor and Legislature enacted in 2018 so that it is both available for families making up to $150,000 and refundable. This change will benefit over 80,000 more families, and increase the average credit for those making under $30,000 to $277. The estimated cost is $17 million.
• Extending the Veterans Property Tax Deduction to Peacetime Veterans: The Appropriations Act will support the expanded deduction approved through the 2020 ballot measure. The estimated foregone revenue cost is $15 million.
• Expanding the Earned Income Tax Credit (EITC) Age of Eligibility of 21 to 18 and to Those Over Age 65: The Governor and the Legislature have provided meaningful middle-class tax relief by boosting the EITC from 35 percent to 40 percent since 2018. Last year, the Governor led on expanding eligibility to an additional 60,000 New Jersey residents by lowering the minimum age from 25 to 21. In Fiscal Year 2022, Governor Murphy and the Legislature will expand eligibility to those 65 and older without dependents and to those as young as 18, which is projected to help another 90,000 residents – roughly 70,000 over 65; and 20,000 between the ages of 18 and 21. The estimated foregone revenue cost is $13 million.

Senate Republican Budget Officer Steven Oroho, who represents District 24, said that in light of the billions of dollars in surplus money this plan doesn't go far enough.

“Despite the State receiving a $5 billion tax windfall in recent weeks, Democrats are proposing no significant new tax relief for New Jerseyans. That stands in stark contrast to our Republican plan to significantly boost tax relief and fix long-standing structural budget issues," Oroho said. "It’s likely we’ll see a spending spree of epic proportions for legislative add-ons when the final details of the budget are released.”

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