The good news for New Jersey taxpayers: a rebate is coming.
The state, brimming with cash from revenue more than ever dreamed of during the pandemic, is ready to give money back to taxpayers.
The questions are: How much, to whom and when?
On Thursday morning, Governor Phil Murphy unveiled the ANCHOR Property Tax Relief Program – an initiative he said would distribute $900 million in property tax relief to nearly 1.8 million homeowners. and tenants across the state in fiscal year 2023.
Because it relies on the Homestead rebate (which greatly expands eligibility), Jersey residents would see their first checks in the spring of 2023.
Here’s how Murphy’s plan works:
- Owners earning up to $250,000 per year can receive an average rebate of $700;
- Tenants earning up to $100,000 per year are eligible for a rebate of up to $250 to help defray the cost of rent increases due to property taxes;
- The program would expand over three years. By FY 2025, property tax rebates under the program would average $1,150 per eligible household, with the state’s annual investment in the program up to $1.5 billion per year. year.
“This program will provide direct property tax relief to households, whether they own or rent,” Murphy said. “Although the state does not set property taxes, we believe we need to take steps to offset the costs and make living in New Jersey more affordable.
“Through the ANCHOR property tax relief program, we can provide real support to families and seniors, helping them stay in the homes and communities they love.”
The program can materialize thanks to much better than expected tax revenues. The state had forecast that its major tax revenue would decline by more than 5% this year. In fact, the latest figures show that state revenues have not only increased, but by at least 20%.
These numbers lead to legislation by Senate Republicans.
Senate Republicans, who said they expected Murphy to announce during his budget speech that the state had collected at least $3 billion more in taxes than expected this year, said the state should return that money.
Senate Republicans will introduce legislation to immediately help New Jersey taxpayers.
Here’s how their plan works:
- The money would be returned as a refundable tax credit on 2021 state tax returns to taxpayers with gross income of $500,000 or less;
- The tax credit is $500 for single or married individuals filing separately and $1,000 for those filing jointly, as head of household or surviving spouse;
- The credit is refundable, which means that any excess credit beyond the taxpayer’s tax liability would be paid to the taxpayer in the form of a tax refund;
- Taxpayers who have already filed their 2021 tax returns would not be required to amend their returns to obtain the refundable credit. It would be sent to them automatically by the Treasury.
Senate Republicans wonder: why wait? Residents need money now. After all, they said, it is taxpayers’ money.
“If Governor Murphy’s poor financial projections caused taxpayers to pay billions more than necessary, Senate Republicans think we should give them back to families in New Jersey hit hard by inflation,” Sen. Declan said. O’Scanlon (R-Holmdel).
“Under our plan, overtaxed New Jerseyans would get their money back this spring through tax credits of $500 or $1,000 depending on filing status. There is no complicated formula, just money in the pockets of New Jerseyans in a simple, fair and transparent way.
The catch: The Republican plan may only be for a year – although they have said they hope to continue giving discounts, assuming revenues continue to soar.
What program will be adopted? It’s simple: Which party controls the Legislative Assembly?
After all, Assembly Speaker Craig Coughlin (D-Woodbridge) has already expressed enthusiasm for Murphy’s plan.
“I am excited about the prospect of addressing property taxes to bring meaningful savings to New Jerseyans, and I commend the governor for this bold proposal,” he said. “As a speaker, I fought to restore and fully fund the Homestead Rebate.
“I look forward to working for landlords and renters to provide greater affordability for middle class and working families. The Assembly will immediately begin its work of reviewing the proposal and details as part of our annual budget review process.