Bill Text: NJ A5835 | 2018-2019 | Regular Session | Introduced
Bill Title: Increases benefit amounts incrementally under New Jersey earned income tax credit program from 40 percent to 100 percent for resident individuals who cannot claim qualifying child.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2019-11-14 - Introduced, Referred to Assembly Appropriations Committee [A5835 Detail]
Download: New_Jersey-2018-A5835-Introduced.html
Sponsored by:
Assemblywoman VERLINA REYNOLDS-JACKSON
District 15 (Hunterdon and Mercer)
Assemblyman BENJIE E. WIMBERLY
District 35 (Bergen and Passaic)
Assemblyman JOHN J. BURZICHELLI
District 3 (Cumberland, Gloucester and Salem)
SYNOPSIS
Increases benefit amounts incrementally under New Jersey earned income tax credit program from 40 percent to 100 percent for resident individuals who cannot claim qualifying child.
CURRENT VERSION OF TEXT
As introduced.
An Act increasing benefit amounts under the New Jersey earned income tax credit program for certain resident individuals, amending P.L.2000, c.80.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.2000, c.80 (C.54A:4-7) is amended to read as follows:
2. There is established the New Jersey Earned Income Tax Credit program in the Division of Taxation in the Department of the Treasury.
a. (1) A resident individual who is eligible for a credit under section 32 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.32) shall be allowed a credit for the taxable year equal to a percentage, as provided in [paragraph] paragraphs (2) and (3) of this subsection, of the federal earned income tax credit that would be allowed to the individual or the married individuals filing a joint return under section 32 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.32) for the same taxable year for which a credit is claimed pursuant to this section, subject to the restrictions of this subsection and subsections b., c., d. and e. of this section.
(2) For the purposes of the calculation of the New Jersey earned income tax credit for resident individuals, except those who qualify for paragraph (3) of this subsection, the percentage of the federal earned income tax credit referred to in paragraph (1) of this subsection shall be:
(a) 10% for the taxable year beginning on or after January 1, 2000, but before January 1, 2001;
(b) 15% for the taxable year beginning on or after January 1, 2001, but before January 1, 2002;
(c) 17.5% for the taxable year beginning on or after January 1, 2002, but before January 1, 2003;
(d) 20% for taxable years beginning on or after January 1, 2003, but before January 1, 2008;
(e) 22.5% for taxable years beginning on or after January 1, 2008 but before January 1, 2009;
(f) 25% for taxable years beginning on or after January 1, 2009 but before January 1, 2010;
(g) 20% for taxable years beginning on or after January 1, 2010, but before January 1, 2015;
(h) 30% for taxable years beginning on or after January 1, 2015, but before January 1, 2016;
(i) 35% for taxable years beginning on or after January 1, 2016, but before January 1, 2018;
(j) 37% for the taxable year beginning on or after January 1, 2018, but before January 1, 2019;
(k) 39% for the taxable year beginning on or after January 1, 2019, but before January 1, 2020; and
(l) 40% for taxable years beginning on or after January 1, 2020.
(3) For the purposes of the calculation of the New Jersey earned income tax credit for those who cannot claim a qualifying child as defined under section 152 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.152) for the federal earned income tax credit, the percentage of the federal earned income tax credit referred to in paragraph (1) of this subsection shall be:
(a) 40% for the taxable year beginning on or after January 1, 2020, but before January 1, 2021;
(b) 60% for the taxable year beginning on or after January 1, 2021, but before January 1, 2022;
(c) 80% for the taxable year beginning on or after January 1, 2022, but before January 1, 2023; and
(d) 100% for taxable years beginning on or after January 1, 2023.
(4) To qualify for the New Jersey earned income tax credit, if the claimant is married, except for a claimant who files as a head of household or surviving spouse for federal income tax purposes for the taxable year, the claimant shall file a joint return or claim for the credit.
b. In the case of a part-year resident claimant, the amount of the credit allowed pursuant to this section shall be pro-rated, based upon that proportion which the total number of months of the claimant's residency in the taxable year bears to 12 in that period. For this purpose, 15 days or more shall constitute a month.
c. The amount of the credit allowed pursuant to this section shall be applied against the tax otherwise due under N.J.S.54A:1-1 et seq., after all other credits and payments. If the credit exceeds the amount of tax otherwise due, that amount of excess shall be an overpayment for the purposes of N.J.S.54A:9-7; provided however, that subsection (f) of N.J.S.54A:9-7 shall not apply. The credit provided under this section as a credit against the tax otherwise due and the amount of the credit treated as an overpayment shall be treated as a credit towards or overpayment of gross income tax, subject to all provisions of N.J.S.54A:1-1 et seq., except as may be otherwise specifically provided in P.L.2000, c.80 (C.54A:4-6 et al.).
d. The Director of the Division of Taxation in the Department of the Treasury shall establish a program for the distribution of earned income tax credits pursuant to the provisions of this section.
e. Any earned income tax credit pursuant to this section shall not be taken into account as income or receipts for purposes of determining the eligibility of an individual for benefits or assistance or the amount or extent of benefits or assistance under any State program and, to the extent permitted by federal law, under any State program financed in whole or in part with federal funds.
(cf: P.L.2018, c.45, s.4)
2. This act shall take effect immediately.
STATEMENT
This bill increases the benefit amounts under the New Jersey earned income tax credit program (NJEITC) for resident individuals who cannot claim a qualifying child as defined in the federal Internal Revenue Code. Under existing law, starting January 1, 2020, the NJEITC will provide a tax credit equal to 40 percent of the federal earned income tax credit. This bill places resident individuals who cannot claim a qualifying child in their calculation of their federal earned income tax credit on a separate schedule that increases this amount from 40 percent to 60 percent on January 1, 2021, from 60 percent to 80 percent on January 1, 2022, and then to 100 percent on January 1, 2023. All other resident individuals who qualify for the NJEITC are still limited to 40 percent of the federal earned income tax credit.
