This bill proposes an increase in the benefit amount under the New Jersey Earned Income Tax Credit (EITC) program from 40 percent to 60 percent of the federal benefit amount, effective for the taxable year beginning on or after January 1, 2022. The current law allows a refundable tax credit under the New Jersey gross income tax that is equal to 40 percent of the federal EITC. The bill aims to enhance tax relief for low- to moderate-income workers and families by aligning the state benefit more closely with the federal program.

The specific legal changes include the deletion of the current percentage of 40% for taxable years beginning on or after January 1, 2020, and the insertion of a new percentage of 60% for taxable years beginning on or after January 1, 2022. This adjustment is intended to provide greater financial support to eligible residents who qualify for the federal EITC, as they must first apply for the federal credit to be eligible for the state credit. The bill is set to take effect immediately upon enactment.

Statutes affected:
Introduced: 54A:4-7