Law Lowers Cost of Housing
New Package Cuts Taxes for Jersey Small Businesses
Incentivizes Research + Development in NJ
WASHINGTON, D.C. — Today, January 31, 2024, U.S. Congressman Josh Gottheimer (NJ-5) voted to pass a bipartisan tax package that will help Jersey families pay for childcare and child-related expenses like food and diapers. It serves as a critical down payment on expanding the Child Tax Credit which ultra-right extremists tried to cut drastically. The legislation will also lower taxes for Jersey small businesses, make housing more affordable, and offer important relief to victims of disasters. The legislation passed by a 357 to 70 vote.
Previously, the American Rescue Plan temporarily expanded the Child Tax Credit for 2021 and helped more than 61 million children, lifting nearly four million out of poverty. This helped cut child poverty in half nationally, including a 48 percent reduction in New Jersey. Since its expiration, child poverty rates have skyrocketed, more than doubling the rate from a historic low of 5.2 percent in 2021 to 12.4 percent in 2022 — wiping out all the gains we made as a nation.
Across the nation, from 2019 to just this past October alone, the average cost of childcare is up 32 percent. Jersey was ranked the second most expensive state in the country for childcare last year, costing $442.19 per week on average.
“I’m proud to help pass this bipartisan legislation which will help lower the cost of childcare for Jersey families. This tax package will help families afford the childcare they need to go to work and for their children to grow and learn safely. It will also lift countless Jersey children out of poverty. On top of that, this legislation will go a long way toward cutting taxes for Jersey small businesses, investing in research and development, and making housing more affordable for our families,” said Congressman Josh Gottheimer (NJ-5). “This is a huge win for our children, for hardworking families, small businesses, and bipartisan governing.”
Earlier this month, Gottheimer announced his new, three-part Childcare Affordability Plan which helps parents go to work and ensure their children have the care they deserve and need to grow and learn safely.
Expanded Child Tax Credit
- Increases the maximum refundable portion of the Child Tax Credit from $1,600 in 2023 to $1,800 in 2023, $1,900 in 2024, and the full credit in 2025.
- Adjusts the $2,000 maximum per Child Tax Credit for inflation.
- Applies the credit’s phase-in rate on a per-child basis, helping larger families afford the higher costs.
- Offer a one-year income “lookback” provision to create flexibility for families to use either current- or prior-year income to calculate their credit.
Making Housing More Affordable
- Increases the supply of affordable housing by strengthening the Low-Income Housing Tax Credit from 9% to 12.5%
Help for Small Businesses
- Allows businesses to immediately deduct the cost of their US-based R+D investments instead of over five years.
- Restores businesses ability to immediately deduct 100% of their investment in machinery and equipment.
- Relaxes the tightened limits on the deductibility of interest expenses, ensuring greater access to credit for businesses that are growing. Allows small businesses to deduct $1.29 million in qualifying expenses, up from $1.16 million currently.
Rebuilds Communities Struck by Disasters
- Provides tax relief to individuals in qualified disaster areas by eliminating the requirement that casualty losses must exceed 10 percent of adjusted gross income (AGI) to qualify for the deduction.