The New Jersey Earned Income Tax Credit (NJEITC) is a credit for certain residents who work and have earned income. The credit reduces the amount of New Jersey tax you owe and may also give you a refund, even if you have no tax liability to New Jersey.
For tax year 2007, all residents who are eligible and file for a Federal earned income credit can also receive a New Jersey earned income tax credit in the amount equal to 20% of the Federal benefit. Previously, eligible applicants had to have New Jersey gross income of $20,000 or less and at least one qualifying child.
Note: If your filing status is married/civil union partner, filing separate return, you may not claim the NJEITC.
2007 NJEITC Amount
The NJEITC is a percentage of your Federal earned income credit. For tax year 2007 your NJEITC amount will be equal to 20% of your Federal earned income credit. For example, if your Federal earned income credit is $3,000, the amount of your NJEITC will be $600. (2007 NJEITC = Federal EIC x 20%)
Part-year residents who qualify for the NJEITC must prorate the amount of the credit based on the number of months as a New Jersey resident.
How to Apply
To receive the NJEITC, you must file a New Jersey resident income tax return. This is true even if you are not required to file a return because your income is equal to or less than the New Jersey filing threshold amount for your filing status. The filing threshold amount for 2007 is $20,000 or less if your filing status is married/civil union couple, filing joint return, head of household, or qualifying widow(er)/ surviving civil union partner. The filing threshold is $10,000 or less if your filing status is single.
When completing your New Jersey income tax return, you must provide the name, social security number, and birth year for any “qualifying child” listed on your Federal Schedule EIC who is not claimed as your dependent for New Jersey purposes.
Changes for 2008 and 2009
For tax year 2008 the amount of the New Jersey credit was equal to 22.5% of the applicant’s Federal earned income credit. The amount increased to 25% of the Federal earned income credit for tax year 2009.
Prior Year NJEITC Information