NJ Earned Income Credit Expansion signed the law: who is eligible

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TRENTON, NJ – More low-income New Jersey residents will be eligible to receive the state’s earned income tax credit under a bill signed by Governor Phil Murphy on Tuesday.

The bill, S3428 / A5345, extends the state earned income tax credit to workers aged 18 or older, whether or not they have children. It also allows people 65 years of age or older to re-apply for the credit, whether or not they have eligible children.

The earned income tax credit can reduce the amount of income tax a person owes, or provide a refund even though the person owes no tax. New Jersey extended eligibility to people 21 and older in September 2020. The bill Murphy signed on Tuesday is a further extension of the program.

“The success of the earned income tax credit has been recognized across the political spectrum,” said Senator Joe Lagana (D-Bergen, Passaic), one of the sponsors of the legislation. “By delivering on our commitment to further expand this program to all eligible workers over 18, we can help more young people stay on top of their finances and provide much-needed relief to hard-working seniors.” “

The Earned Income Tax Credit is a refundable tax credit for working individuals and families of low or middle income. It was created by the federal government in 1975, and New Jersey added a state version of credit in 2000.

The credit is estimated at around $ 600 and the expansion would benefit around 10,500 people in fiscal 2022, according to estimates from the State Legislative Services Office.

“Young adults entering the New Jersey workforce deserve to be included in the EITC provisions as they work to build something for themselves and their families,” said MP Verlina Reynolds-Jackson (D-Mercer, Hunterdon), who sponsored the Assembly version. .

To receive the NJ State EITC, you must complete a federal tax form, be eligible for the federal EITC, and file a state income tax return (if you are married but filing separately, you cannot request EITC from NJ).

Visit www.irs.gov/eitc for more information on filing the Federal EITC or call 1-800-829-1040. For more information on income and eligibility on filing visit NJ EITC www.njeitc.org or call 609-292-6400.

You may be eligible
If you were working full-time or part-time or were self-employed in 2020, you may be eligible.
To be eligible, your earned income and adjusted gross income (AGI) must be less than:

  • $ 50,954 ($ 56,844 joint deposit) with three or more eligible children
  • $ 47,440 ($ 53,330 joint deposit) with two eligible children
  • $ 41,756 ($ 47,646 married) with one eligible child
  • $ 15,820 ($ 21,710 of joint declaration) without eligible children

For the 2020 tax year, you could receive a maximum federal credit of:

  • $ 6,660 with three or more eligible children
  • $ 5,920 with two eligible children
  • $ 3,584 with an eligible child
  • $ 538 without eligible children

And a maximum NJ State credit of:

  • $ 2,662 with three or more eligible children
  • $ 2,368 with two eligible children
  • $ 1,434 with an eligible child
  • $ 215 without eligible children

(Investment income must be $ 3,650 or less for the year.)

You can find out if you are eligible and get an estimate of your credit by visiting the Internal Revenue Services (IRS) EITC Assistant

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