With the tax filing deadline quickly approaching, New Jersey families are encouraged to apply for the New Jersey Earned Income Tax Credit (EITC) if they haven’t already. This tax credit is still available to low- and moderate-income workers, with eligible households receiving an average of $826.
What is the New Jersey Earned Income Tax Credit?
New Jersey’s Treasury Department is reminding residents to apply for this state-funded tax credit before the April 15 tax filing deadline. Established approximately two decades ago, the EITC costs the state over $450 million annually.
This refundable credit is available to working residents who are at least 18 years old and meet the income limits. A refundable credit means that recipients will receive a refund for any credit amount exceeding their tax liability.
New Jersey’s EITC program is one of the most generous in the nation, with eligible recipients receiving up to $2,972 annually, depending on their income and number of children. Those without dependents can receive up to $240.
Despite the significant benefits, many eligible taxpayers do not apply for the New Jersey EITC. A recent Treasury press release highlighted that over 200,000 taxpayers fail to claim this credit. As a result, state officials are actively working to raise awareness about the program.
“As residents prepare to file their taxes, Treasury encourages taxpayers to check the Division of Taxation’s NJEITC webpage to determine if they are eligible and to take advantage of the program,” the press release stated.
Focus on Enhancing the State EITC
To qualify for the New Jersey Earned Income Tax Credit, a person must be at least 18 years old, reside in New Jersey, meet income requirements, have a valid Social Security number, and file a New Jersey Resident Income Tax Return. The state follows the federal EITC income guidelines for its program.
For those who were New Jersey residents for only part of the year, their state EITC amount will be prorated based on the number of months they lived in New Jersey.
The New Jersey EITC has bipartisan support. In 2018, the state approved a phased expansion of the credit, which is currently about 40% of the federal EITC. Lawmakers are now considering increasing the state EITC to 45% of the federal credit, though this proposal has not yet been discussed in either House.
Additionally, recent efforts have focused on expanding the program to include more workers. For example, the minimum eligibility age was recently lowered to 18, and the upper age limit was expanded to include those 65 and older without dependents.