Senate Commerce Committee Statement to Senate, No. 1444 — State of New Jersey (May 16, 2022)

Summary

A Senate Commerce Committee statement to the Senate on Senate Bill No. 1444 with committee amendments, State of New Jersey, dated May 16, 2022, reporting the bill favorably. As amended, the bill provides a refundable gross income tax credit for 50 percent of early home mortgage principal payments made in addition to required monthly payments, up to $1,000 per year for up to 10 taxable years. The statement says it is modeled on federal legislation called the Building Equity for the American Middle-Class Act (BEAM Act). Eligible mortgages must be for a primary residence, for a term between 15 and 30 years, with equal payments; the credit phases down for single taxpayers with taxable income between $125,000 and $135,000 and joint filers between $250,000 and $270,000.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
1444

with
committee amendments

STATE
OF NEW JERSEY

DATED: MAY 16,
2022

The
Senate Commerce Committee reports favorably and with committee amendments
Senate Bill No. 1444.

As
amended, this bill provides for a refundable gross income tax credit for 50
percent of early home mortgage principal payments that taxpayers make in
addition to their required monthly mortgage payments. Extra payments made in
addition to home mortgage required monthly payments are required to be credited
as a payment on the principal amount of the mortgage loan amount. The annual
refundable tax credit is allowed up to $1,000 per year and can be claimed for
up to 10 taxable years. This bill is modeled on federal legislation referred
to as the Building Equity for the American Middle-Class Act (BEAM Act) that
will encourage families to build equity in their home, pay down their home
mortgage more quickly, thus creating more wealth while securing the American
dream of homeownership. This bill will provide a gross income tax break that
rewards middle class families that chose to more quickly pay down the principal
amounts of their home mortgages.

Mortgages
eligible for this tax credit are purchase money mortgages or refinanced
purchase money mortgages that must: (1) be for a primary residence, (2) be for
a term between 15 and 30 years, and (3) require payments that are each the same
amount and made in equal intervals during the term of the mortgage. The $1,000
limit on the amount of the credit phases down for single taxpayers who have taxable
income between $125,000 and $135,000 and for married individuals filing jointly
who have taxable income between $250,000 and $270,000. No credit is allowed
for single taxpayers with taxable income over $135,000 and for married
individuals filing jointly with taxable income over $270,000. Married
individuals must file a joint return to claim the credit.

COMMITTEE AMENDMENTS

The committee amended the bill to require the credit for married individuals filing
jointly to phase out at a rate of five percent for every $1,000 of taxable income between
$250,000 and $270,000 .

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