In the Garden State, working families have the opportunity to claim a state version of the Earned Income Tax Credit (EITC), which seeks to put more money back into the taxpayer’s hands. Along with twenty-four other states and the District of Columbia, New Jersey enacted the EITC and modeled the state credit after the federal version.

Having similar eligibility requirements, taxpayers in the state of New Jersey who qualified for the federal EITC will most likely qualify for the state version as well. The EITC is an important tax benefit to take advantage of, as it can help reduce that amount of income tax owed.

In New Jersey, the EITC is offered at 20% of the federal credit and is fully refundable. That means that whatever portion of the credit exceeds the resident’s tax liability will be paid back to the taxpayer as a refund. Families without a tax liability can expect to receive the entire credit amount, if they qualify. The EITC can be used to offset other state and local taxes that the family may be responsible for.

The tax credit has proven effective at lowering poverty rates and keeping families working, regardless of the wage. By putting more of the family’s hard earned money back where it belongs (with the taxpayer), the EITC is a welcome relief for many working families at tax time.