4th stimulus checks in limbo however N.J.’s $500 rebates coming quickly. What you should know.
Are you already missing these stimulus checks?
While there doesn’t seem to be much momentum behind a fourth round of federal payments, lower and middle-class New Jersey residents could look forward to this summer: a $ 500 tax break courtesy of the state government.
The discounts are part of a compromise that Governor Phil Murphy and the Democrats who control the law made last year when lawmakers agreed to raise taxes on millionaires. Murphy put more than $ 300 million in its proposed budget for the discounts. Senate President Stephen Sweeney, D-Gloucester, said last week he expected the plan to pass even though budget negotiations have not yet started in earnest.
“I think it’s a done deal,” he told NJ Advance Media. “In fact, I think it has to be made permanent, but we have to talk about it in the future. We did this to help the middle class. Well, the middle class needs to be helped all the time, not always. “
The discount proposal resolved a long-standing dead end between the governor and Sweeney over Murphy’s demands for an increase in the tax rate for high-income workers. The deal, announced in September, came about amid the aftermath of the pandemic. Officials formulated the agreement as necessary to help both the state and its residents during the health and economic crisis.
“We hope it takes off a bit of the pressure,” said Sweeney. “It’s not the be-all and end-all, obviously it’s $ 500. But it’s $ 500 more than they had. And we’re still in strange times and I hope it helps. “
Republicans and business lobbyists immediately viewed the proposal as a poorly conceived political gimmick that will drive wealthy taxpayers out of the state.
Others, meanwhile, criticized the program’s limitation to taxpayers with one qualified dependent child, effectively excluding most older households.
Here’s what we know about the discounts so far:
1. Who is entitled to a tax break?
Married couples in New Jersey with incomes less than $ 150,000 and at least one dependent child would qualify for a discount check. Individuals with income less than $ 75,000 and at least one dependent child qualify.
2. Eligibility for federal stimulus payments was based on adjusted gross income. Will these discounts be too?
The benefit is based on 2020 gross income, i.e. your income before taxes and deductions.
3. Are non-residents eligible?
No. Only New Jersey residents are eligible for the discount.
4. How many households will qualify?
The government estimates 764,000 New Jersey households will receive a discount.
5. How much money do you get?
The maximum discount is $ 500.
In contrast to federal stimulus payments, there is no sliding scale based on income. However, it’s a non-refundable tax break, which means your state income tax liability must be at least $ 500 to receive the full $ 500 tax break. If your state income tax liability is only $ 300, get a $ 300 discount. If it’s $ 100, you will get a $ 100 discount.
“The discount is less than $ 500 or an amount equal to the tax amount after credits for the 2020 gross income tax return,” the Treasury Department said.
The more than 716,000 eligible couples filing together would receive an average of $ 425, while the nearly 48,000 individual applicants would receive an average of $ 297, according to the Treasury Department.
6. What if you have more than one dependent child?
Also, unlike the government stimulus payments, this discount does not take into account how many dependent children you have.
7. When do the checks run out?
The finance department could start issuing discounts in July, a spokeswoman said.
8. Will this discount be made out as a check? Or a direct deposit?
The form of payment is still being worked out, according to the Ministry of Finance.
9. Can the discount be garnished for back tax payments or child benefit?
It will be subject to offsetting individual liability that withholds tax refunds or benefits from individuals who owe federal taxes, child support, traffic fines or other debts, the Treasury Department said.
10. How much does the discount program cost?
Tax officials put the price of the discounts at $ 319 million. Murphy has included funding for the program in his proposed budget, but lawmakers have to opt out.
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Samantha Marcus can be reached at [email protected].
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