NJPP: New Jersey Should Boost Working Families & Build a Stronger Economy by Expanding its Earned Income Tax Credit
New Jersey Should Boost Working Families & Build a Stronger Economy by Expanding its Earned Income Tax Credit
Trenton, NJ – Lawmakers in Trenton should expand New Jersey’s Earned Income Tax Credit (EITC), a state version of the successful federal tax credit that helps working families earning low wages meet basic needs. State EITCs – which are on the books in 29 states, including New Jersey – build on the success of the federal credit by reducing hardship for working families and children, and boosting the nation’s future economic prospects, according to a new report from the Center on Budget and Policy Priorities (CBPP).
“State lawmakers have a real opportunity in this year’s budget to improve the lives of working families in every corner of the Garden State,” said Sheila Reynertson, Senior Policy Analyst at New Jersey Policy Perspective. “New Jersey’s EITC already does a lot to help our families and kids, but by lowering the age eligibility to 18 years old stronger, New Jersey could give a boost to millennials struggling to get by in high-cost New Jersey. ”
State EITCs provide extensive benefits to children, families, and communities, and are straightforward to administer and to claim. The also help rebalance upside-down state tax codes, in which low- and moderate-income families pay higher state and local taxes as a share of their income than do upper-income families.
By expanding New Jersey’s EITC, policymakers would be building on recent progress made by a number of states, including California and Maryland, which expanded access to the credit for people who were previously ineligible. Because state lawmakers have moved to support working families through state EITCs, almost half of recipients of the federal EITC are also eligible for a state credit, and state EITCs boost the earnings of working families by nearly $5 billion annually.
“The EITC helps the many working families with children who struggle to make ends meet on low wages, and it ensures that women and communities of color — two groups that disproportionately work in low-wage jobs — see the fruits of their labor and share more fully in economic growth,” said Samantha Waxman, Policy Analyst at the Center on Budget and Policy Priorities. “State lawmakers can build on the proven effectiveness of the federal EITC by expanding their state-level credits to help families keep working and reduce poverty, especially among children.”
Read the full report here:
