Some parents in this state could get a $500 tax credit each year
Will you be one of them?
- The enhanced Child Tax Credit was not available to families in 2022.
- Today, one state is trying to compensate by making funds available to low-income people.
Last year, when unemployment was high, many families found themselves in financial difficulty, especially those who were forced to deplete their savings to get through the first part of the COVID-19 crisis. Fortunately, help has been made available to the public in the form of not just stimulus checks, but also an enhanced child tax credit.
Last year, under the enhanced Child Tax Credit, families could receive up to $3,600 per child under age 6 and up to $3,000 per child aged 6 to 17. However, this year, the child tax credit is capped at $2,000 per child.
Another great feature of the enhanced child tax credit is that it paid parents monthly last year from July to December. Those payments were only half of the total credit value, but getting that money in monthly installments was a lifeline for struggling families.
Meanwhile, although lawmakers haven’t waived the increase in the child tax credit, it’s not scheduled for 2022. But one state is taking steps to provide similar assistance to families with children.
Residents of a state could receive a salary
New Jersey is often considered one of the most expensive states in the United States. This is largely due to factors such as high house prices and property taxes. But many families can’t easily give up the Garden State — not when they have ties to their communities and, in some cases, are tied to jobs in nearby big cities like Philadelphia and New York.
Gov. Phil Murphy says he wants to provide relief to New Jersey families struggling to cope with the rising cost of living. To that end, he recently signed legislation creating a child tax credit program for low- and middle-income households. Under the program, those who earn $80,000 or less and file a New Jersey state tax return will be eligible for relief.
In concrete terms, the new child tax credit will be worth:
- $500 for households earning $30,000 per year or less
- $400 for households earning more than $30,000 per year but less than $40,000
- $300 for households earning more than $40,000 per year but less than $50,000
- $200 for households earning more than $50,000 per year but less than $60,000
- $100 for households earning more than $60,000 per year but less than $80,000
Limited relief for some
While New Jersey’s new Child Tax Credit is a good step toward providing financial assistance to families in need, the reality is that it may end up failing for many — especially those who qualify for a simple $100 credit, which these days won’t go very far in paying bills.
In fact, some lawmakers have criticized the new tax credit not only for its limited impact, but also for its timeliness. That’s because parents won’t be able to claim the credit until they file their 2023 tax returns in the spring of 2024. So on balance, the first payment under the new credit might not arrive until around two years.
Of course, it’s easy to argue that some family support is better than none. But in a state like New Jersey where a modest home’s property tax bill may go up $1,000 year over year, a $100 or even $500 credit won’t doesn’t seem like much.
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