Budget panels approve child tax credit expansion

Lawmakers in both chambers’ budget committees approved an expansion of the state’s child tax credit on Tuesday, boosting the program one year after its enactment.

The bill, which passed in votes that fell largely along party lines, would double the refundable per-child credit’s maximum level to $1,000. Children must be five or younger to qualify for the credit.

“We saw a huge success with it last year, and we recognized that there were things that we did last year that worked phenomenally well. We wanted to be sure that we extended it this year,” said Sen. Teresa Ruiz (D-Essex), her chamber’s majority leader and the bill’s prime sponsor.

The exact size of the tax credit is based on filers’ income. Those making $30,000 or less annually would earn the maximum award, while those earning between $60,000 and $80,000 would receive a $200 credit, the smallest afforded under the bill.

Under current law, New Jersey’s child tax credit awards per-child refundable credits of between $100 and $500, based on income. The bill does not change the program’s income limits.

The tax credits help residents meet child care costs while inflation remains a stubborn problem, Ruiz said.

“What I think it does is it sends a strong message to families at a time when the cost of living is going up,” she said.

The nonpartisan Office of Legislative Services says taxpayers would claim the credit for between 311,000 and 372,000 children, roughly 180,000 of whom would qualify for the maximum award.

New Jersey lawmakers created a state-level child tax credit last year in a bid to defray the high costs of child care and provide financial relief to families still grappling with the economic fallout from the pandemic.

Peter Chen, a senior policy analyst at progressive think tank New Jersey Policy Perspective, called the bill an “outstanding first step to expand the already successful child tax credit” and said he hopes lawmakers continue to expand it.

Sen. Declan O’Scanlon (R-Monmouth) was the only Republican senator to back the bill. In the lower chamber, Assemblyman Hal Wirths (R-Sussex) voted against it, while Assemblyman Gerry Scharfenberger (R-Monmouth) abstained.

Sen. Steve Oroho (R-Sussex), his chamber’s minority leader, said Republican members are concerned the bill would extend awards to undocumented children and, by doing so, encourage migrants to make dangerous border crossings.

“We want every child to be successful,” Oroho said, but “some of us believe it actually acts as an incentive for people to risk their lives to try and get here.”