Have you claimed the New Jersey Earned Income Tax Credit? If not, you can still do that

With just a few days left until the tax filing deadline, New Jersey families are encouraged to apply for tax relief if they haven’t already done so. One tax credit still available to low- and moderate-income workers is the New Jersey Earned Income Tax Credit (EITC). Eligible households could receive an average of $825.

New Jersey Earned Income Tax Credit: What is it?

The New Jersey Department of Finance reminds residents to apply for state-funded tax relief before the April 15 tax filing deadline. The credit was established about 20 years ago and costs the state more than $450 million annually.

This tax credit is available to working residents who are 18 years of age or older and meet income limits. The New Jersey Earned Income Tax Credit is a refundable credit. This means that the beneficiary will receive a refund for the balance of the deduction even if the deduction is greater than the tax liability.

New Jersey’s Earned Income Tax Credit program is one of the most generous in the country, with the average credit being about $826. Eligible beneficiaries can receive a credit of up to $2,972 per year, depending on their income and number of children. People without dependents can receive up to $240.

Despite offering a significant credit, many taxpayers who qualify for the New Jersey Earned Income Tax Credit do not claim it. A Treasury Department press release issued a few months ago found that more than 200,000 taxpayers are not claiming the EITC. So state officials are working to spread awareness about the New Jersey Earned Income Tax Credit.

“As residents prepare their tax returns, the Treasury encourages taxpayers to check the Department of Taxation’s NJEITC webpage to determine if they qualify for the program and to take advantage of the program,” the press release said.

Focus on Strengthening State EITC

To qualify for the New Jersey Earned Income Tax Credit, you must be at least 18 years old, be a New Jersey resident, meet the income requirements, have a valid Social Security number, and file a New Jersey resident income tax return. New Jersey follows federal EITC income requirements for the state EITC.

If you lived in New Jersey for only part of the year, your state EITC will depend on the number of months you were a New Jersey resident.

New Jersey’s EITC has support from both Democrats and Republicans. In 2018, Gov. Phil Murphy approved a phased expansion of state credit, which currently amounts to about 40% of federal credit.

Now lawmakers are considering raising the state EITC to 45% of the federal credit, but the proposal has yet to receive hearings in either chamber.

Additionally, lawmakers in recent years have tried to expand the program’s reach to cover more workers. For example, lawmakers recently lowered the minimum eligibility age to 18 and expanded the upper age limit to 65 or older without dependents.