Bill
Bill > S3988
NJ S3988
NJ S3988Allows tax credit for expenses incurred for medical insurance premiums and deductible payments for certain taxpayers under gross income tax.
summary
Introduced
12/19/2024
12/19/2024
In Committee
12/19/2024
12/19/2024
Crossed Over
Passed
Dead
Introduced Session
2024-2025 Regular Session
Bill Summary
This bill would allow income-eligible resident taxpayers to claim a gross income tax credit for expenses incurred for medical insurance premiums and insurance deductible medical expense payments. Specifically, the bill provides that an individual filer or married individual filing separately would be allowed to claim the credit, provided that the taxpayer has gross income not greater than $65,000 during the taxable year. The bill also provides that a married individual filing a joint return or an individual filing as head of household may claim the credit, provided that the taxpayer's combined gross income is not greater than $130,000 during the taxable year. Under the bill, the amount of the tax credit would equal the difference between: (1) the total of insurance deductible medical expenses and medical insurance premium expenses incurred by the taxpayer during the taxable year, minus (2) 8.5 percent of the taxpayer's gross income for the taxable year. Under current law, taxpayer are allowed to claim gross income tax deductions for certain medical expenses, including a deduction for certain medical expenses paid in excess of two percent of the taxpayer's gross income. Self-employed individuals may also claim a deduction for amounts paid for insurance constituting medical care. This bill prohibits a taxpayer from claiming the tax credit authorized in this bill related to any expense for which one of these deductions is claimed. The bill also requires the Director of the Division of Taxation in the Department of the Treasury to coordinate with the Commissioner of Health to advertise the availability of the tax credits allowed under this bill.
AI Summary
This bill introduces a new tax credit for New Jersey residents to help offset medical insurance costs, targeting individuals and families with gross incomes at or below certain thresholds. Specifically, individual filers or married individuals filing separately with gross incomes up to $65,000, and married couples filing jointly or individuals filing as head of household with combined gross incomes up to $130,000, can claim a tax credit. The credit amount is calculated by subtracting 8.5% of the taxpayer's gross income from their total medical insurance costs, which include both insurance premiums and deductible medical expenses. Importantly, taxpayers cannot claim this credit for expenses already claimed as deductions under existing tax laws. The bill defines key terms such as "insurance deductible medical expense" (the amount paid before insurance coverage kicks in) and "health plan" (various types of medical insurance coverage). The Director of the Division of Taxation, in coordination with the Commissioner of Health, is required to advertise these tax credits to encourage residents to maintain regular medical care. The bill will take effect for taxable years beginning on or after the January 1st following its enactment, providing potential financial relief for residents with medical expenses.
Committee Categories
Business and Industry
Sponsors (1)
Last Action
Introduced in the Senate, Referred to Senate Commerce Committee (on 12/19/2024)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2024/S3988 |
| BillText | https://pub.njleg.gov/Bills/2024/S4000/3988_I1.HTM |
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