Governor Murphy has signed several bills into law that take effect in 2021 and may provide a boost to New Jersey as the economy continues to suffer amid the COVID crisis. As reproted by The Patch, those two tax laws are as follows:
Health insurance tax (S2676/A4389)
The governor signed legislation to create the New Jersey Health Insurer Assessment, which sets the rate at 2.5 percent of net written premiums and will support the state’s reinsurance program and state-level subsidies in FY 2021.
The law went into effect on Jan. 1.
The legislation establishes the New Jersey Health Insurer Assessment (HIA), which is a continuation of a federal assessment on health insurance companies that was to sunset at the end of the year.
All of the revenue generated will be used to support residents and families purchasing policies on the individual market. It will allow the state to provide state-level subsidies, in addition to federal subsidies that are available, for the majority of consumers purchasing insurance on the State Based Marketplace during the ACA Open Enrollment Period.
The subsidy program will be available to New Jerseyans with annual income up to 400 percent of the Federal Poverty Level, which allows an individual earning up to $51,040, and a family of four earning up to $104,800, to qualify for the subsidy program.
The estimated average subsidy for an individual would be at least $564 a year, and at least $2,256 a year for a family of four. Actual subsidy amounts will be based on an actuarial simulation study being conducted by the Department of Banking and Insurance in order to maximize the benefit for New Jerseyans.
Corporate business tax
Gov. Murphy and lawmakers agreed to restore a 2.5 percent surtax on the Corporation Business Tax for corporations with taxable net income in excess of $1 million.
The tax was supposed to drop to 1.5 percent this year, and then it was scheduled to be eliminated by the end of 2021. Now it’s extended through 2023.
The tax is expected to yield an estimated $210 million during the 2020-21 fiscal year, Murphy said.