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Bill

S 4211

Increases amount of allowable New Jersey earned income tax credit from 40 percent to 50 percent of federal benefit amount.

2026-2027 Regular Session Introduced by Raj Mukherji and 1 co-sponsor

New Jersey would increase its EITC from 40% to 50% of the federal EITC, boosting relief for eligible low- and moderate-income workers and families.

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Bill Summary · S 4211

Bill Summary: S 4211 (New Jersey, 222nd Session)

Title

Increases amount of allowable New Jersey earned income tax credit from 40 percent to 50 percent of federal benefit amount.

Purpose and Intent

The bill proposes to raise the state Earned Income Tax Credit (EITC) for eligible New Jersey taxpayers. By increasing the state credit from 40% of the federal EITC benefit to 50%, the measure aims to provide greater financial support to low- and moderate-income working individuals and families, improve workforce incentives, and reduce poverty-related hardship.

Key Provisions

  • Adjustment to the NJ EITC calculation:
    The authorized New Jersey EITC would be calculated at 50% of the amount of the taxpayer’s federal EITC, as opposed to the current 40%.

  • Eligibility alignment:
    The change is contingent on eligibility criteria for the New Jersey EITC remaining consistent with existing state law (e.g., meeting federal EITC qualifications, income thresholds, and filing status rules as defined by state statute).

  • Effective date:
    The bill specifies an implementation timeline (exact date/details would be specified in the bill’s text). Potentially, the rule would apply to tax year(s) following passage or a specified future tax year.

  • Administration and interaction with other credits:
    The bill does not abandon existing state tax credit structures; it amends the rate at which the EITC is calculated. It would continue to interact with other New Jersey tax credits and deductions as defined by state law.

Who Would Be Affected

  • Low- and moderate-income workers and families who qualify for the federal EITC and file New Jersey state taxes would see an increase in their NJ EITC from 40% to 50% of their federal benefit amount.
  • State residents with qualifying income levels set by federal EITC criteria (e.g., income thresholds adjusted for filing status) would be eligible for a higher state credit.
  • Taxpayers who currently rely on the NJ EITC as part of their tax relief, including households with dependents that qualify for the federal EITC.

Potential Impacts

  • Financial relief: Higher state credit translates to larger refunds or reduced tax liabilities, providing additional funds for households in need.
  • Work incentives: By increasing the EITC percentage, the bill could strengthen the incentive to work, particularly for low-wage earners.
  • Budgetary considerations: The rise in the state EITC reduces state revenue in the short term; the fiscal impact would be outlined in the bill’s fiscal note, including expected cost per year and any offsets.

Procedural and Timeline Considerations

  • Sponsorship: Co-sponsors include Britnee Timberlake and Raj Mukherji.
  • Legislative process: As with any bill, passage by both houses and the governor’s signature would be required to become law. The bill’s text would specify the effective date and any transition provisions.
  • Fiscal note: A supplemental or updated fiscal impact analysis would accompany committee consideration, detailing anticipated revenue effects, economic impact, and distributional effects.

If you’d like, I can tailor this summary to a specific audience (e.g., policymakers, taxpayers, or advocacy groups) or add a comparison with the current NJ EITC provisions.

Compiled from official sources — confirm details with the bill’s official record.

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