SENATE COMMUNITY AND URBAN AFFAIRS COMMITTEE

STATEMENT TO

SENATE, No. 1821

with committee amendments

STATE OF NEW JERSEY

DATED:  MARCH 5, 2026

      The Senate Community and Urban Affairs Committee reports favorably with committee amendments Senate Bill No. 1821.

      As amended, 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 qualified taxpayer 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.

      The bill defines a “qualified taxpayer” to include: (1) for married individuals filing a joint return and individuals filing as head of household or surviving spouse for federal income tax purposes, a taxpayer with gross income not exceeding $90,000 in the taxable year; (2) 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 (3) for unmarried individuals, other than those filing as head of household or surviving spouse, a taxpayer with gross income not exceeding $60,000 in the taxable year.

      Under the bill, the amount of the tax credit would be determined according to a schedule based on the taxpayer’s gross income, place of residency, and filing status.  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 of tax credit would be determined as follows: 

      (1)  100 percent of the excess rent paid during the taxable year, 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 if 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 paid during the taxable year, 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 if 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; and

      (3)  50 percent of the excess rent paid during the taxable year, 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.

      In the case of married individuals filing a joint return, a married individual filing separately, or individuals filing as head of household or as surviving spouse for federal income tax purposes, the amount of the tax credit would be determined as follows:

      (1)  100 percent of the excess rent paid during the taxable year, not to exceed $1,000, if the taxpayer’s gross income does not exceed $75,000 and the taxpayer resides in a high-cost area, or if the taxpayer’s gross income does not exceed $37,500 and the taxpayer does not reside in a high-cost area;

      (2)  75 percent of the excess rent paid during the taxable year, not to exceed $1,000, if the taxpayer’s gross income exceeds $75,000 but does not exceed $90,000 and the taxpayer resides in a high-cost area, or if the taxpayer’s gross income exceeds $37,500 but does not exceed $75,000 and the taxpayer does not reside in a high-cost area; and

      (3)  50 percent of the excess rent paid during the taxable year, not to exceed $1,000, if the taxpayer’s gross income exceeds $75,000 but does not exceed $90,000 and the taxpayer resides in an area other than 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 in the case of married individuals filing separately, eligibility for the tax credit would 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.  Moreover, the bill further provides that 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 the tax credits allowed for both taxpayers may not exceed $1,000 for the taxable year.  In this case, the amount of the allowable credit would be allocated between each individual 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.

      The bill also provides that for any taxpayer who receives a 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.

      This bill was pre-filed for introduction in the 2026-2027 session pending technical review.  As reported, the bill includes the changes required by technical review, which has been performed.

COMMITTEE AMENDMENTS:

      The committee amendments revise several provisions of the bill related to the allowance of the tax credit for married individuals filing a joint return, married individuals filing separately, and individuals filing as head of household or as surviving spouse for federal income tax purposes.

      Specifically, the amendments increase the income eligibility requirements for these taxpayers from $60,000 to $90,000.  The amendments also modify the schedule used to determine the amount of the tax credit allowed for these taxpayers by increasing the income thresholds by 150 percent of the amounts otherwise applicable to individual filers.

      The amendments further provide that in the case of married individuals filing separately, both of whom are qualified taxpayers and reside in the same principal residence, eligibility for the credit would be determined based upon 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.  The amendments also provide that the aggregate amount of tax credits allowed for both taxpayers may not exceed $1,000 for the taxable year.  In this case, the amount of the allowable tax credit would be allocated between each individual taxpayer in proportion to each individual’s share of the total rent paid or in accordance with a written allocation election submitted with the returns submitted by both individuals.