The New Jersey Earned Income Tax Credit (NJEITC) is for residents of limited income. To take the credit, you must have worked and earned wage or business income. The credit reduces the amount of New Jersey tax you owe and may give you a refund, even if you owe no tax to New Jersey.
Most residents are eligible for the NJEITC if they are eligible to receive a federal Earned Income Credit (EIC). You must file a federal return and receive the federal EIC before you can receive the NJEITC.
If your filing status is married/civil union partner, filing separately
, you cannot claim the NJEITC.
How to Apply
- To receive the NJEITC, you must file an NJ-1040 using information from your federal return. This is true even if your income is equal to or less than the New Jersey filing threshold amount.
The NJEITC payment is equal to 35% of the federal benefit. For example, if your federal EIC is $3,000, the amount of your NJEITC will be $1,050 (2017 NJEITC = federal EIC x 35%). A part-year resident who qualifies for the NJEITC must adjust the amount of the NJEITC based on the number of months he/she was a New Jersey resident.
For Tax Year 2017, the New Jersey Earned Income Tax Credit payment amount was 35% of the federal benefit. The new law increases the New Jersey Earned Income Tax Credit payment amount from 35% to 40% of the federal earned income tax credit phasing in the increase over three years. The State benefit amount increases as follows:
After Tax Year 2020, the New Jersey Earned Income Tax Credit remains at 40% of the federal earned income tax credit.
- 37% in tax year 2018;
- 39% in tax year 2019; and
- 40% in tax year 2020.
When Will I Get My Refund?
Many NJEITC filers will receive their refund within our normal estimated processing times
. However, some filers may receive notices requesting additional information. You must respond to the notice in order to complete the processing of your refund. Some filers who qualify for an earned income credit will receive letters asking for additional information. If you receive such a notice, you must respond with the requested information or we won’t be able to apply this credit – which can boost your refund.