Expanded Earned Income Tax Credit Program Expands, Available To More People

In tandem with national Earned Income Tax Credit Awareness Day, the NJ Department of the Treasury is encouraging every eligible taxpayer to take advantage of New Jersey’s expanded program, which can provide anywhere from several hundred to several thousand dollars in relief to those who are eligible.

With the 2020 tax filing season, New Jersey’s Earned Income Tax Credit (NJEITC) is increasing to 40 percent of the federal credit, which is expected to put an average of $882 back into taxpayers’ pockets, as part of the third of three annual increases under a 2018 law signed by Governor Murphy. Additionally, the Governor signed a law alongside last year’s budget that lowered the minimum age eligibility for the EITC from 25 to 21 to capture more young adults, a change that is expected to benefit an additional 60,000 taxpayers.

To be eligible for the NJEITC, a taxpayer must:

  • Meet all qualifications for the federal earned income tax credit, except for the minimum age requirement;
  • Be a resident of New Jersey who works or earns income;
  • Have a qualifying child or be at least 21 years old and under 65;
  • Meet the income limits for their filing status; and
  • Have a valid Social Security number (This includes spouses and any qualifying child listed on the tax return).

For more information on eligibility requirements and applying for the New Jersey Earned Income Tax Credit, visit eitc.org.

Federal guidelines enable a wide variety of low and moderate income taxpayers to qualify for both the federal and state credit. Those earning a maximum adjusted gross income of up to $56,844 may qualify for the credit if their filing status is Married Filing Jointly and they claim three or more children or qualified dependents; and those earning a maximum adjusted gross income of up to $50,594 may qualify if they are filing as Single, Head of Household or Widowed and claim three or more children or qualified dependents.

Additionally, under the federal Taxpayer Certainty and Disaster Tax Relief Act of 2020, if someone’s earned income was higher in 2019 than in 2020, they can use the 2019 amount to figure their EITC for 2020.

Treasury’s Division of Taxation offers 24-7 information and assistance online, including free tax forms and a free electronic filing system. Additionally, several free tax preparation assistance programs are available for low to moderate income individuals, individuals with disabilities, non-English speaking residents, and adults over 60. For more information, visit the Division of Taxation’s website.

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