Allows gross income tax credits to certain renters whose rent exceeds 35 percent of gross income.

A1000

ASSEMBLY, No. 1000

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman CAROL A. MURPHY

District 7 (Burlington)

SYNOPSIS

���� Allows gross income tax credits to certain renters
whose rent exceeds 35 percent of gross income.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

allowing a gross income tax credit for certain
rent payments, supplementing Title 54A of the New Jersey Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� a.� Except as otherwise
provided in subsection b. of this section, a resident taxpayer with gross
income not in excess of $60,000 in the taxable year, and who pays rent on the
principal residence of the taxpayer in excess of 35 percent of the taxpayer�s
gross income, shall be allowed a credit against the tax otherwise due for the
taxable year under the �New Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et
seq., in an amount determined in accordance with the following schedule:

���� (1) 100 percent of the excess
rent paid by the taxpayer during the taxable year, not to exceed $1,000, if:

���� (a) the taxpayer�s gross
income for the taxable year does not exceed $50,000, and the taxpayer resides
in a high-cost area; or

���� (b) the taxpayer�s gross
income for the taxable year does not exceed $25,000, and the taxpayer does not
reside in a high-cost area;

���� (2) 75 percent of the excess
rent paid by the taxpayer during the taxable year, not to exceed $1,000, if:

���� (a) the taxpayer�s gross
income for the taxable year exceeds $50,000 but does not exceed $60,000, and
the taxpayer resides in a high-cost area; or

���� (b) the taxpayer�s gross
income for the taxable year exceeds $25,000 but does not exceed $50,000, and
the taxpayer does not reside in a high-cost area; or

���� (3) 50 percent of the excess
rent paid by the taxpayer during the taxable year, not to exceed $1,000, if the
taxpayer�s gross income for the taxable year exceeds $50,000 but does not
exceed $60,000, and the taxpayer does not reside in a high-cost area.

���� b.��� In the case of a
taxpayer who receives a State or federal tenant-based housing subsidy, and who otherwise
qualifies for a tax credit pursuant to subsection a. of this section, the
taxpayer shall be allowed a credit against the tax imposed under the �New
Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et seq., in lieu of the amount
authorized pursuant to subsection a. of this section, in an amount equal to
1/12 of the amount of unsubsidized rent paid by the taxpayer during the taxable
year.

���� c.��� The amount of the credit
allowed pursuant to this section shall be applied against the tax otherwise due
under the �New Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et seq., after all
other credits and payments. If the credit exceeds the amount of tax otherwise
due, the amount of excess shall be treated as an overpayment for the purposes
of N.J.S.54A:9-7, provided that subsection (f) of N.J.S.54A:9-7 shall not apply,
and further provided that a taxpayer may elect to receive the overpayment in
monthly installments during the taxable year immediately following the taxable
year for which the credit is claimed.

���� d.��� As used in this section:

���� �Excess rent� means the
portion of rent paid by a taxpayer for the taxpayer�s principal residence
during the taxable year that exceeds 35 percent of the taxpayer�s gross income
for the taxable year.

���� �High-cost area� means any
location in the State in which the small area fair market rent is used to
calculate the tenant-based housing subsidy provided to participants of the
federal Housing Choice Voucher Program during the taxable year for which the credit
is claimed.

���� 2.� If a taxpayer qualified
for the credit allowed pursuant to section 1 of P.L.�� �, c.��� (C.������� )
(pending before the Legislature as this bill) in the taxable year immediately
preceding the date of enactment of P.L.�� �, c.��� (C.������� ) (pending before
the Legislature as this bill), the taxpayer shall file an amended tax return with
the director within 90 days following the date of enactment of P.L. , c. (C. )
(pending before the Legislature as this bill) to claim the credit or refund of
any resulting overpayment of tax.

���� 3.� This act shall take effect
immediately and shall apply retroactively to taxable years beginning on or
after the taxable year immediately preceding the date of enactment.

STATEMENT

���� This bill would establish a
refundable gross income tax credit for certain renters whose rent exceeds 35
percent of their gross income.

���� Under the bill, a taxpayer
with gross income not in excess of $60,000, and who pays rent on the principal
residence of the taxpayer in excess of 35 percent of the taxpayer�s gross
income, may be allowed a refundable gross income tax credit based on a percentage
of the excess rent paid by the taxpayer during the taxable year, not to exceed
$1,000.� Under the bill, a taxpayer may elect to receive the refundable portion
of the tax credit in monthly installments during the taxable year immediately
following the taxable year for which the credit is claimed.

���� Specifically, the amount of
the tax credit would be determined according to the following schedule:

���� (1) 100 percent of the excess
rent, not to exceed $1,000, if: the taxpayer�s gross income does not exceed
$50,000 and the taxpayer resides in a high-cost area; or the taxpayer�s gross
income does not exceed $25,000 and the taxpayer does not reside in a high-cost
area;

���� (2) 75 percent of the excess
rent, not to exceed $1,000, if: the taxpayer�s gross income exceeds $50,000 but
does not exceed $60,000 and the taxpayer resides in a high-cost area; or the
taxpayer�s gross income exceeds $25,000 but does not exceed $50,000 and the
taxpayer does not reside in a high-cost area; or

���� (3) 50 percent of the excess
rent, not to exceed $1,000, if the taxpayer�s gross income exceeds $50,000 but
does not exceed $60,000, and the taxpayer does not reside in a high-cost area.

���� As used in the bill, the term
�high-cost area� is defined as any location in the State in which the small
area fair market rent is used to calculate the tenant-based housing subsidy
provided to participants of the federal Housing Choice Voucher Program during
the taxable year for which the credit is claimed.

���� The bill also provides that
for any taxpayer who receives State or federal tenant-based housing subsidy,
and who otherwise qualifies for the tax credit allowed under the bill, the
taxpayer may instead elect to receive a tax credit in an amount equal to 1/12
of the unsubsidized rent paid by the taxpayer during the taxable year.

���� Additionally, the bill
provides that the tax credit would be authorized retroactively, beginning on
and after the taxable year immediately preceding the date of enactment of this
bill.� If a taxpayer qualified for the credit in the taxable year immediately
preceding the date of enactment, the taxpayer would be required to file an
amended tax return with the Director of the Division of Taxation within 90 days
following the date of enactment to claim the credit or refund of any resulting
overpayment of tax.