TRENTON – The Senate Budget and Appropriations Committee today approved legislation sponsored by Senator Shirley K. Turner that would extend income guidelines for the New Jersey Earned Income Tax Credit (EITC) to reflect federal EITC levels.
“The expansion of the EITC will provide assistance for hundreds of thousands of families in poverty,” said Senator Turner, D-Mercer. “New Jersey has lagged behind for too long and the Governor and I are committed to pursuing all avenues available to reduce poverty in this state.”
Senator Turner noted the measure was the first step supported by Governor Corzine to provide more poverty relief through the state EITC.
The bill, S-2647, would raise the eligibility threshold for the NJEITC from $20,000 to the federal level. Currently, federal income limits are $32,001 for those with one child ($34,001 if married) and $36,348 for those with more than one child ($38,348 if married). The bill also would extend the credit to individuals with no children earning less than $12,120 and married couples without children earning less than $14,120.
“We will double the number of EITC recipients with this bill. This will be the single largest anti-poverty effort undertaken by New Jersey since we adopted the EITC in 2000,” added Senator Turner.
Those who qualify under the federal guidelines would be eligible to receive an additional 20% of their federal EITC under the New Jersey program. Governor Corzine has announced plans to increase that amount to 22.5% in FY09 and 25% in FY10.
Currently, approximately 250,000 individuals and families receive the state EITC. This bill would double that number to close to 500,000 recipients.
“The expansion of the EITC bill will lessen the gap between the haves and the have-nots. Anyone who looks to oppose this measure is making it perfectly clear that they support the status quo and don’t care about eradicating poverty in New Jersey,” explained Senator Turner.
Individuals and families who qualify for the EITC receive the credit as a refund from the State Treasury when they file their annual income tax returns.
The State Treasurer estimates that the expansion of the EITC program will cost the state in FY08 an additional $28.1 million over the current expenditure of $123 million.
The bill will be considered by the full Senate next week.