Budget & Taxes (Income Tax) in New Jersey

in committee · New Jersey · Senate May 18, 2026

S 4305: Increases grant limit for reassignment of employees to State in certain cases; requires publication of guidance and authorizes State intervention for income tax refund claims filed outside State.

This bill creates a pilot program to help businesses bring New Jersey resident employees back to the state by offering financial grants. To qualify, companies must have at least 25 full-time employees and be primarily located outside New Jersey, with a total annual funding cap of $35 million. The grant amount is generally limited to the state income tax withheld from the relocated workers, though it can be higher if the move is projected to generate significantly more tax revenue for the state. Additionally, the legislation allows the state to intervene and provide tax credits to residents who were wrongly denied refunds by other states for taxes paid on income earned while working in New Jersey.

Topics ✓ Budget & Taxes

Sub-Topics Income Tax Revenue

in committee · New Jersey · General Assembly May 7, 2026

A 4891: Increases benefit amounts and expands eligibility under New Jersey earned income tax credit program.

This bill increases the percentage of the federal earned income tax credit that New Jersey residents receive, raising the state match to 45% for tax years starting in 2026. It also expands eligibility by allowing adults aged 18 and older who are ineligible for the federal credit due to age requirements to still qualify for the state program. Additionally, the legislation permits married individuals who are victims of domestic abuse to file separately while still receiving the credit, removing the usual requirement to file jointly.

Topics ✓ Budget & Taxes ✓ Labor & Employment

Sub-Topics Income Tax Tax Credits

in committee · New Jersey · Senate Jun 1, 2026

S 4378: Establishes a formula for the distribution of State aid to school districts.

This bill establishes a new formula for distributing State aid to public school districts in New Jersey, directly affecting how funding is allocated to these districts. The key mechanism calculates a per-pupil aid amount by dividing the total projected State income tax revenue by the total statewide student enrollment, then multiplies that figure by each district's projected enrollment to determine its specific funding. This approach replaces previous allocation methods with a system based on projected enrollment and total income tax revenue, ensuring aid distribution is tied to these specific financial and demographic metrics.

Topics ✓ Budget & Taxes ✓ Education

Sub-Topics Income Tax Revenue School Funding

in committee · New Jersey · General Assembly May 7, 2026

A 4890: Increases benefit amount under New Jersey Earned Income Tax Credit program from 40 percent to 60 percent of federal benefit amount.

This bill amends New Jersey law to increase the state Earned Income Tax Credit benefit from 40 percent to 60 percent of the federal amount, starting with the 2022 tax year. The change directly affects low- to moderate-income residents who file state tax returns and are eligible for the federal Earned Income Tax Credit. By raising the multiplier, the legislation ensures that qualifying individuals receive a larger refundable tax credit against their state income tax liability. The bill takes effect immediately upon passage, expanding financial support for workers and families without altering the underlying federal eligibility requirements.

Topics ✓ Budget & Taxes

Sub-Topics Income Tax Tax Credits

in committee · New Jersey · General Assembly May 7, 2026

A 4986: Requires State Board of Education to establish program to pay high school equivalency exam fees for certain low-income individuals; provides gross income tax and corporation business tax deductions for donations made to support fees.

This bill directs the New Jersey State Board of Education to create a program that covers the fees for high school equivalency exams for low-income individuals, defined as those living in households earning 150 percent or less of the federal poverty guidelines. To fund these payments, the legislation establishes a dedicated, nonlapsing fund within the Department of Education that accepts public donations and state appropriations. The bill also provides tax deductions for both individual and corporate taxpayers who contribute to this fund, making it easier for donors to support the initiative.

Topics ✓ Budget & Taxes ✓ Education ✓ Immigration

Sub-Topics Business Taxes Income Tax K-12 Education

in committee · New Jersey · Senate May 11, 2026

S 4212: Increases child tax credit amount under gross income tax for resident taxpayers with children ages six and under and expands child tax credit eligibility to resident taxpayers with children ages six to 11.

This bill proposes to increase the New Jersey child tax credit for families with children under six years old and to expand eligibility to include children aged six through 11. Under the new provisions, taxpayers with an income of $30,000 or less would receive a $2,000 credit for each child under six, while those with children aged six to 11 would receive a $1,000 credit, with amounts gradually decreasing as income rises to $80,000. The legislation also sets a maximum total credit limit of $2,500 per taxpayer and clarifies that the credit is refundable if it exceeds the tax owed. These changes would apply to tax years beginning on or after January 1, 2026, for resident New Jersey taxpayers.

Topics ✓ Budget & Taxes

Sub-Topics Income Tax Tax Credits

in committee · New Jersey · Senate Jun 11, 2026

S 4289: Increases gross income tax deduction available to veterans from $6,000 to $9,000 and indexes deduction for inflation.

This New Jersey bill increases the state gross income tax deduction for veterans from $6,000 to $9,000. To qualify, individuals must have been honorably discharged or released under honorable circumstances from active duty in the U.S. Armed Forces, reserve components, or the New Jersey National Guard. The legislation also mandates that the $9,000 deduction amount be adjusted annually for inflation starting in tax year 2027 based on the Chained Consumer Price Index. These changes apply to taxable years beginning on or after January 1, 2026.

Topics ✓ Budget & Taxes ✓ Veterans

Sub-Topics Income Tax Memorials & Recognition Veteran Education Veteran Healthcare

in committee · New Jersey · General Assembly May 7, 2026

A 4949: Provides gross income tax credit for volunteer first responders who incur costs for child care services.

This New Jersey bill creates a state tax credit for volunteer first responders who pay for child care services. To qualify, individuals must work at least 150 hours annually in their volunteer capacity, which includes required training time. The credit covers 50% of eligible child care costs, such as those for licensed facilities, in-home care, and after-school programs, with a maximum benefit of $5,000 per year. Recipients must submit documentation to the Division of Taxation to verify their service hours and child care expenses.

Topics ✓ Budget & Taxes

Sub-Topics Income Tax Tax Credits

in committee · New Jersey · General Assembly May 7, 2026

A 4995: Provides gross income tax credit for certain household pet expenses.

This New Jersey bill introduces a tax credit for residents who own household pets, specifically dogs or cats kept for companionship. The legislation allows taxpayers to claim up to $300 for everyday pet expenses like food and supplies, plus an additional $600 for veterinary care, with a combined maximum credit of $900 per year. To receive this benefit, owners must file their tax returns with proof of pet ownership and receipts detailing the qualified expenses. The law explicitly excludes working animals, such as those used by law enforcement or in research facilities, from the definition of eligible pets.

Topics ✓ Budget & Taxes

Sub-Topics Income Tax Tax Credits

in committee · New Jersey · Senate May 11, 2026

S 4125: Allows gross income tax deduction for amounts paid for removal of lead, asbestos, sodium, chloride, and other contaminants from taxpayer's property.

This New Jersey bill allows homeowners to deduct up to $45,000 from their gross income for costs associated with removing hazardous contaminants from their residential properties. The measure specifically covers expenses related to lead and asbestos abatement, replacing lead pipes and windows, and treating private well water contaminated with sodium or chloride. To claim the deduction, taxpayers must provide affidavits from their local municipality confirming that the work was performed by certified contractors. The provision applies to all income levels and includes a retroactive option for expenses incurred between January 1, 2018, and the bill's enactment, with the tax benefit set to expire on December 31, 2027.

Topics ✓ Budget & Taxes ✓ Environment ✓ Housing

Sub-Topics Income Tax Drinking Water

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