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

S1821 1R

[First Reprint]

SENATE, No. 1821

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Senator TROY SINGLETON

District 7 (Burlington)

Senator� ANGELA V. MCKNIGHT

District 31 (Hudson)

Co-Sponsored by:

Senators Wimberly, Turner, Stack and Cryan

SYNOPSIS

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

CURRENT VERSION OF TEXT

���� As reported by the Senate Community and Urban Affairs
Committee on March 5, 2026, with amendments.

��

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
1
[
resident
]

qualified
1

taxpayer
1
[
with gross
income not in excess of $60,000 in the taxable year, and
]
1

who pays rent on the principal residence of the taxpayer in excess of 35
percent of the taxpayer�s gross income
1
[
,
]
1

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
1
[
schedule
]

schedules
1
:

���� (1)
1
In
the case of an unmarried individual other than an individual filing as head of
household or as a surviving spouse for federal income tax purposes, the amount
shall be determined as follows:

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

����
1
[
(a)
]

(i)
1
the
taxpayer�s gross income for the taxable year does not exceed $50,000, and the
taxpayer resides in a high-cost area; or

����
1
[
(b)
]

(ii)
1
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;

����
1
[
(2)
]

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

����
1
[
(a)
]

(i)
1
� 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

����
1
[
(b)
]

(ii)
1
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

����
1
[
(3)
]

(c)
1
� 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
1
[
.
]

; and

����
(2) In the case of married individuals
filing a joint return, a married individual filing separately, or an individual
filing as head of household or as surviving spouse for federal income tax
purposes, the amount shall be determined as follows:

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

����
(i) the taxpayer�s gross
income for the taxable year does not exceed $75,000, and the taxpayer resides
in a high-cost area; or

����
(ii) the taxpayer�s gross
income for the taxable year does not exceed $37,500, and the taxpayer does not
reside in a high-cost area;

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

����
(i) the taxpayer�s gross
income for the taxable year exceeds $75,000 but does not exceed $90,000, and
the taxpayer resides in a high-cost area; or

����
(ii) the taxpayer�s gross
income for the taxable year exceeds $37,500 but does not exceed $75,000, and
the taxpayer does not reside in a high-cost area; or

����
(c) 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 $75,000 but does
not exceed $90,000, and the taxpayer does not reside in a high-cost area.
1

���� 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
1
qualified
1

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.��������
1
(1) In
the case of a married individual filing separately, eligibility for the tax
credit allowed pursuant to this section shall be determined based on the
combined gross income of the taxpayer, together with the taxpayer�s spouse or
civil partner, and the total rent paid by both individuals in the taxable year
for the principal residence.

����
(2)� In the case of married
individuals filing separately, both of whom are qualified taxpayers and reside
in the same principal residence, the aggregate value of tax credits allowed
pursuant to this section shall not exceed $1,000 for the taxable year.� The amount
of the allowable tax credit shall be allocated between each qualified taxpayer
in proportion to each individual�s share of the total rent paid during the
taxable year, or in accordance with a written allocation election submitted
with the returns filed by both individuals.

����
e.
1
�� 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.

����
1
�Qualified
taxpayer� means: for married individuals filing a joint return and individuals
filing as head of household or as surviving spouse for federal income tax
purposes, a taxpayer with gross income not in excess of $90,000 in the taxable
year; for married individuals filing separately, a taxpayer with combined gross
income, together with the taxpayer�s spouse or civil partner, not in excess of
$90,000 in the taxable year; and for unmarried individuals other than
individuals filing as head of household or as a surviving spouse for federal
income tax purposes, a taxpayer with gross income not in excess of $60,000 in
the taxable year.
1

���� 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.