Assemblyman Douglas H. Fisher

FISHER SEEKS GOVERNOR'S SUPPORT ON BILL TO HELP FAMILIES WITH LIMITED INCOMESNew
Study Shows State's Earned Income Tax Credit Needs Revision

(BRIDGETON) -- Assemblyman Doug Fisher today urged Governor Jon Corzine to lend public support to legislation the South Jersey lawmaker crafted to help working families with low incomes.

Fisher's measure (A-1697) would ease eligibility for the state earned income tax credit (EITC) program. New Jersey currently has the lowest eligibility cutoff among the 50 states. The Fisher bill would put New Jersey's EITC program in line with the federal standard.

The legislation received a boost this week when a progressive think-tank group -- New Jersey Policy Perspective (NJPP) -- issued a new report that determined an additional 250,000 worthy low-income families could qualify for the state's EITC program if the current $20,000 eligibility ceiling were raised to the standard employed in a similar federal program.

"The state's EITC eligibility standards are so woefully behind the curve that New Jersey's program is getting to a point where it could be hurting more families than it is helping," said Fisher.

Under current state law, only single and married taxpayers who earn less than $20,000 and have at least one child are eligible for tax credit.

Fisher's bill would expand eligibility to taxpayers without children who qualify for federal EITC and phase out the $20,000 restrictive ceiling. It also would bring the state's eligibility rules in line with the federal program by 2009.

"The tax burden on low-income working individuals and families can be too much to bear, " said Fisher (D-Cumberland). "Working people living on the financial edge need tax policies that provide a helping hand, not a cold shoulder."

According to NJPP, changing the state's EITC eligibility rules to be in line with the federal program would more than double the number of residents who could take advantage of the credit. More than 203,000 residents received New Jersey's credit in 2005.

The federal program, created in 1975, allows low-income families to apply a credit against their income tax bills. Only households where someone has a job can qualify for the credit.

Congress approved the federal EITC in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

New Jersey is among 19 states that have established their own credits, but it's the only one that does not use the federal guidelines.

A family of four earning up to $38,000 is eligible for the federal earned-income tax credit. What's more, eligibility in the federal program rises with inflation, but New Jerseyss limit has remained the same since it was created in 2000. New Jersey's program also does not offer additional breaks to families with children as the federal program does.

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FOR RELEASE:
January 26, 2007
CONTACT:
Assemblyman Fisher
(856) 455-1011