One of several tax relief measures highlighted in a joint statement Governor Phil Murphy, Senate President Stephen Sweeney and Assembly Speaker Craig Coughlin on Monday included an increase to the Homestead Benefit credit. Measures such as these continue to ensure a more fair and equitable New Jersey to all residents.
New Jersey's senior, disabled and lower-income homeowners who receive credits on their property tax bills through the Homestead Benefit program would see additional aid under a budget agreement that lawmakers revealed Monday.
Though average property taxes have increased 40% in the last 15 years, lawmakers haven't updated the program's credits to keep pace. With an anticipated $10 billion surplus to end this month, they now appear poised to increase the benefit for eligible homeowners.
Increasing the Homestead Benefit credit was one of several tax relief measures highlighted in a joint statement Gov. Phil Murphy, Senate President Stephen Sweeney and Assembly Speaker Craig Coughlin released Monday ahead of the formal introduction of the state budget bill in Trenton.
"Tax relief is a critical component of a stronger and fairer New Jersey," Murphy said in the statement.
Just how much property tax relief would people see?
Now, the average Homestead Benefit is about $490, and it is calculated based on the 2006 tax year, according to the state tax data.
If the budget is approved by lawmakers and signed by Murphy without changes, it would update the tax year to 2017, increasing the benefit to eligible homeowners.
The update to the Homestead Benefit program is estimated to be worth $130 for seniors and disabled homeowners, and $145 for lower-income homeowners. The estimated cost to the state is nearly $80 million, according to the joint statement.
What is the Homestead Benefit program?
The Homestead Benefit is one of the state's most popular tax assistance programs, with roughly 520,000 homeowners who claim the credit.
The program is open to homeowners who are older than 65, blind or disabled and earn less than $150,000 annually, or homeowners under age 65 who are not blind or disabled and earn $75,000 or less, according to the state.
Murphy, Sweeney and Coughlin announced the change Monday morning ahead of the formal introduction of the budget, and while touting other ways the election-year spending plan will put more money in taxpayers' pockets. Murphy is seeking election to a second term in November, and all 120 seats in the Legislature are on the ballot, too.
Other 2021 budget highlights
The budget proposes expanding the child and dependent care credit to make families with income up to $150,000 eligible. More than 80,000 additional families would be able to claim the credit, which lawmakers also want to make refundable — meaning if you owe less tax than the credit is worth, you get to collect the difference. A family making under $30,000 a year would see the credit increase to $277, according to the statement.
It also further expands the Earned Income Tax Credit by widening the eligible age brackets. Murphy and lawmakers have proposed expanding eligibility to residents 65 and over without dependents and people as young as 18. An estimated 90,000 residents would become eligible under the change, according to the joint statement.
Otherwise, the budget enacts changes that have already been announced, including:
- Sending over 760,000 families a rebate of up to $500 as part of the 2020 agreement to levy a higher income tax on people who earn more than $1 million a year; the estimated cost to the state is $319 million, and checks are expected to begin being sent July 1.
- Accounting for $15 million in estimated revenue loss by expanding property tax deductions to veterans who served during peacetime, a measure approved by voters last November.
"This is direct tax relief to middle income families and senior citizens who need it most,” Sweeney said in a statement. “The income tax rebate will put money into the pockets of working families so they can support themselves and their children,"
The budget outlines state spending priorities for 12 months starting July 1. It is expected to be introduced in Trenton and sent to Murphy to sign into law over the next several days.