New Jersey Gov. Phil Murphy Announces Major Tax Cuts — How Much Will You Save?

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By almost any measure, New Jersey has one of the highest tax rates of any state in the country — for both income and property taxes. The Garden State might never find itself on the lower end of the state tax spectrum, but residents can expect “significant tax cuts” in the future, according to recent comments from New Jersey Gov. Phil Murphy.

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In an interview last week with Bloomberg Television, Murphy said lawmakers are looking at other tax cuts in addition to a $2 billion property tax rebate program implemented last year.

“We delivered, I think at this point, 14 or 15 tax cuts already for the middle class, for seniors, for families, and we’re not going to relent,” Murphy said, though he didn’t offer specifics on future tax cuts.

In 2022, Murphy and the New Jersey legislature approved a program that provides tax relief checks for homeowners and renters. The program, called Anchor, replaced an earlier Homestead Benefit program that had begun to shrink due to budget cuts.

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Lower taxes are seen as an important factor in preventing workers from leaving the state. New Jersey lost about 6,000 residents between July 2021 and July 2022, the Philadelphia Inquirer reported, citing Census Bureau data.

New Jersey had the third-highest income tax rate in the country in 2021 at 10.75%, according to Intuit TurboTax. It ranked behind only California at 13.3% and Hawaii at 11%. In contrast, among the states that tax income, Pennsylvania had the lowest rate among states with a flat tax rate — 3.07%, as GOBankingRates recently reported. Eight states have no personal income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming. New Hampshire limits its tax to interest and dividend income only, and not income from wages.

Property taxes fall under local rather than state jurisdiction — and New Jersey counties rank among the most expensive. An analysis from the Tax Foundation, which looked at the percentage of median household income spent on property taxes, found that in 2018, the three most expensive counties in the U.S. were all in New Jersey:

  • Essex County (16.86%)
  • Passaic County (14.62%)
  • Union County (12.70%)

The Anchor program aims to offer relief by providing rebates to homeowners and renters. Here are the rebates available, according to the New Jersey Division of Taxation:

  • Homeowners with annual incomes of $150,000 or less will receive $1,500.
  • Homeowners with incomes of more than $150,000 and up to $250,000 will receive $1,000.
  • Renters with incomes of $150,000 or less will receive $450.
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The deadline for filing the Anchor benefit application is Feb. 28, 2023. The Division of Taxation will begin paying benefits in the late spring of 2023. Payments will be made in the form of a direct deposit or check — not as credits to property tax bills.

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You need an Anchor ID and PIN to apply online or by phone. If you didn’t receive a mailer or email with an ID and PIN but filed a Homestead Benefit application last year, you can access the online ID and PIN inquiry system to retrieve your ID and PIN. Certain homeowners must file a paper application for reasons listed here.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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