NJ Earned Income Credit Expansion Signed Into Law: Who's Eligible

TRENTON, NJ — More low-income New Jersey residents will be eligible to receive the state's Earned Income Tax Credit under a bill Gov. Phil Murphy signed Tuesday.

The bill, S3428/A5345, expands the state's Earned Income Tax Credit to workers who are at least 18 years old whether or not they have children. It also allows those who are 65 or older to claim the credit again whether they have qualifying children or not.

The Earned Income Tax Credit can reduce the amount of income taxes someone owes, or provide a refund even if the person doesn’t owe any taxes. New Jersey expanded the eligibility to those 21 and older in September 2020. The bill Murphy signed Tuesday is a further expansion of the program.

"The success of Earned Income Tax Credit has been recognized across the political spectrum," said Sen. Joe Lagana (D-Bergen, Passaic), one of the sponsors of the legislation. "By upholding our commitment to further expand this program to all eligible workers over 18, we can help more young people get their finances under control and give hard-working seniors some much-needed relief."

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

The credit is estimated to be worth about $600 and the expansion would benefit about 10,500 people for Fiscal Year 2022, the state Office of Legislative Services estimates.

"Young adults entering New Jersey’s workforce deserve to be included in the provisions of the EITC as they are working to build something for themselves and their families," said Assemblywoman Verlina Reynolds-Jackson (D-Mercer, Hunterdon), who sponsored the Assembly version.

To receive the NJ state EITC, you must file a federal tax form, be eligible for the federal EITC and file a state income tax return (if you are married but file separately, you may not claim the NJ EITC).

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

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

• $50,954 ($56,844 married filing jointly) with three or more qualifying children
• $47,440 ($53,330 married filing jointly) with two qualifying children
• $41,756 ($47,646 married filing jointly) with one qualifying child
• $15,820 ($21,710 married filing jointly) with no qualifying children

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

• $6,660 with three or more qualifying children
• $5,920 with two qualifying children
• $3,584 with one qualifying child
• $ 538 with no qualifying children

And a maximum NJ state credit of:

• $2,662 with three or more qualifying children
• $2,368 with two qualifying children
• $1,434 with one qualifying child
• $ 215 with no qualifying 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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