Expands eligibility under New Jersey earned income tax credit program to allow taxpayers who are victims of domestic abuse to claim credit with filing status of married filing separately.

A2243

ASSEMBLY, No. 2243

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman SHANIQUE SPEIGHT

District 29 (Essex and Hudson)

Assemblywoman CARMEN THERESA MORALES

District 34 (Essex)

SYNOPSIS

���� Expands eligibility under New Jersey earned income
tax credit program to allow taxpayers who are victims of domestic abuse to
claim credit with filing status of married filing separately.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
expanding eligibility under the New Jersey earned
income tax credit program for victims of domestic abuse, 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
(2) 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 and the
modifications of paragraph (4) of this subsection.

���� (2) For the purposes of the
calculation of the New Jersey earned income tax credit, 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)��
(a)
� 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)�� A married taxpayer
shall not be required to satisfy the joint filing requirement imposed pursuant
to subparagraph (a) of this paragraph and section 32 of the federal Internal
Revenue Code of 1986 (26 U.S.C. s.32) if the taxpayer files as married filing
separately and the taxpayer: (i) is living apart from the taxpayer�s spouse at
the time the taxpayer files the gross income tax return; (ii) is unable to file
a joint return because the taxpayer is a victim of domestic abuse; and (iii)
indicates on the taxpayer�s gross income tax return that the taxpayer meets the
criteria set forth in this subparagraph.

���� (4)�� A resident individual
who is at least 18 years of age or older, but 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, shall be eligible for
the New Jersey earned income tax credit if that resident individual is
ineligible to claim the federal earned income tax credit due to age
requirements.� The resident individual shall meet all qualifications, except
for the minimum or maximum age, for the federal earned income tax credit in
order to be eligible for the New Jersey earned income tax credit.� Calculation
of the New Jersey earned income tax credit available to individuals pursuant to
this paragraph shall be predicated on the federal maximum amount for taxpayers
with no qualifying child for each taxable year beginning on and after January
1, 2020.

���� 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.2021, c.130, s.1)

���� 2.��� This act shall take
effect immediately and apply to taxable years beginning on or after January 1
next following the date of enactment.

STATEMENT

���� This bill expands eligibility
under the New Jersey earned income tax credit program for taxpayers who are
victims of domestic abuse, and cannot file a joint return.� Under the federal
program, if a taxpayer is married, the taxpayer is required to file a joint
return with their spouse to be eligible for the federal earned income credit.� However,
victims of domestic abuse are typically required to file as married filing
separately, losing their federal earned income credit and New Jersey earned
income tax credit eligibility in the process.

���� The bill exempts a married
taxpayer from the joint filing requirement imposed by federal and State law if
the taxpayer files as married filing separately and the taxpayer: (i) is living
apart from the taxpayer�s spouse at the time the taxpayer files the gross
income tax return; (ii) is unable to file a joint return because the taxpayer
is a victim of domestic abuse; and (iii) indicates on the taxpayer�s gross
income tax return that the taxpayer meets the criteria set forth in the bill.