Key Takeaways
• Starting 2025, NJEITC includes ITIN filers, enabling immigrant taxpayers to claim state Earned Income Tax Credit.
• State child tax credit rises to $2,200 with $600 credit for children ages 6-11 for incomes under $30,000.
• New deductions for tips up to $25,000 and overtime pay up to $12,500 benefit immigrant workers through 2028.
Immigrants living and working in New Jersey in 2025 will see important changes to state tax benefits and credits, especially with the expansion of the New Jersey Earned Income Tax Credit, the state child tax credit, and several new deductions. These updates are designed to include more immigrant families, especially those who file taxes using Individual Taxpayer Identification Numbers (ITINs). Here’s a clear and detailed summary of what’s changed, who is affected, when these changes take effect, what actions are needed, and what these updates mean for pending and future tax filings.
Summary of What Changed
Starting January 1, 2025, New Jersey has expanded eligibility for its main tax credits and increased the amounts available. The most important changes include:
- The New Jersey Earned Income Tax Credit (NJEITC) now allows immigrants who file taxes with ITINs to qualify, not just those with Social Security numbers.
- The state child tax credit has increased, and eligibility now clearly includes ITIN filers.
- Other deductions—like those for tips, overtime, and seniors—have been raised or clarified to benefit more workers, including immigrants.
These changes are part of a broader effort by the state to make tax relief more accessible to all working families, regardless of immigration status.
Who Is Affected
These updates affect a wide range of people in New Jersey, including:
- Immigrant workers and families who use ITINs to file taxes because they do not have Social Security numbers.
- Low- and moderate-income families who may not have claimed these credits in the past.
- Tipped workers, overtime workers, and seniors who may now qualify for larger deductions.
- Anyone with children under 17, especially those with children ages 6 to 11, who can now claim higher child tax credits.
If you are an immigrant living in New Jersey, especially if you file taxes with an ITIN, these changes could mean hundreds or even thousands of dollars in extra refunds or tax savings for your family.
Effective Dates
- January 1, 2025: Most changes, including expanded eligibility for the New Jersey Earned Income Tax Credit and the increased state child tax credit, take effect for the 2025 tax year. This means you will claim these credits when you file your taxes in early 2026.
- July 4, 2025: The increase in the general child tax credit from $2,000 to $2,200 per child takes effect.
- Through 2028: The overtime pay deduction is available for the next several years.
Required Actions for Immigrants and Families
To benefit from these new and expanded credits, you must:
- File a New Jersey Resident Income Tax Return (Form NJ-1040) even if your income is below the usual filing threshold. This is the only way to claim the New Jersey Earned Income Tax Credit, the state child tax credit, and other deductions.
- You can find the official NJ-1040 form and instructions on the New Jersey Division of Taxation website.
- Claim and qualify for the federal Earned Income Tax Credit (EITC) if you are eligible. The state credit is based on your federal EITC amount.
- Use your ITIN if you do not have a Social Security number. The state now recognizes ITINs for both the NJEITC and the child tax credit.
- Respond quickly to any requests for documents or information from the New Jersey Treasury. This will help avoid delays in getting your refund.
- Seek free tax preparation help if you are unsure how to claim these credits. Many community organizations and the state offer assistance, especially for immigrants and those with limited English.
Detailed Overview of Key Tax Benefits
Let’s break down each major benefit and what it means for immigrants in New Jersey in 2025.
New Jersey Earned Income Tax Credit (NJEITC)
What’s New:
As of January 1, 2025, immigrants who file taxes using Individual Taxpayer Identification Numbers (ITINs) are now eligible for the New Jersey Earned Income Tax Credit. Before this change, only those with Social Security numbers could qualify, which left out many immigrant workers.
How It Works:
- Eligibility:
- You must qualify for the federal Earned Income Tax Credit (EITC). This means you have earned income below certain limits and meet other federal rules.
- You can use an ITIN or a Social Security number to file.
- You must file a New Jersey Resident Income Tax Return (Form NJ-1040), even if your income is low.
- Credit Amount:
- The NJEITC is 35% of your federal EITC for the 2025 tax year.
- The federal EITC for 2025 ranges from $2 to $8,046, depending on your income, filing status, and number of children.
- This means the NJEITC will range from about $1 to $2,816.
- Example: If your federal EITC is $4,000, your NJEITC will be $1,400.
- Income Limits:
- The same as the federal EITC. For example, single filers with no children qualify up to $18,591, and those with three or more children qualify up to $59,899.
- Refundable:
- The NJEITC is refundable. If your credit is more than your tax owed, you get the extra as a refund.
Why This Matters:
This change is a big step for immigrant families. Many who were left out before can now get money back from the state, even if they don’t owe any taxes. According to analysis by VisaVerge.com, up to 200,000 eligible New Jersey residents—many of them immigrants—miss out on this credit each year, often because they don’t know they qualify or don’t file a return.
What You Need to Do:
– Make sure to file both your federal and state tax returns.
– Use your ITIN if you don’t have a Social Security number.
– Ask for help from free tax preparation services if you need it.
New Jersey State Child Tax Credit
What’s New:
There are two main changes for 2025:
- Increased credit for children ages 6 to 11:
- Up to $600 per child for families with income under $30,000.
- The credit phases out for incomes up to $80,000.
- Available to all taxpayers, including those using ITINs.
- General child tax credit increase:
- The credit for children under 17 goes up from $2,000 to $2,200 per child.
- Of this, $1,700 is refundable—meaning you can get it as a refund even if you owe no tax.
- Applies to all eligible taxpayers, including immigrant families.
How It Works:
- Eligibility:
- You must file a New Jersey Resident Income Tax Return (Form NJ-1040).
- You can use an ITIN or a Social Security number.
- Your child must be under 17 for the general credit, or ages 6 to 11 for the special $600 credit.
- Income Limits:
- The $600 credit per child is for families with income under $30,000, phasing out at $80,000.
- The $2,200 credit applies more broadly but follows state income tax rules.
- Refundable:
- Both credits are refundable, so you can get money back even if you owe no tax.
Why This Matters:
These credits can add up to thousands of dollars for families with children. The fact that ITIN filers are now included means many immigrant families will get help they couldn’t access before.
What You Need to Do:
– File your state tax return and claim the credits.
– Make sure to include all qualifying children.
– Use your ITIN if you do not have a Social Security number.
Other State-Level Tax Benefits for Immigrants
Standard Deduction Increase:
– For 2025, the standard deduction is now $15,750 for singles and $31,500 for married couples filing jointly.
– This reduces the amount of income you pay tax on, helping all taxpayers, including immigrants.
No Tax on Tips Deduction:
– Tipped workers can now deduct up to $25,000 in tips from their income for state taxes.
– This is especially helpful for immigrants working in restaurants and other service jobs.
Overtime Pay Deduction:
– Workers can deduct up to $12,500 in overtime pay from their taxable income.
– This deduction is available through 2028.
Senior Citizen Deduction:
– Seniors aged 65 or older with income up to $75,000 (or $150,000 for couples) can deduct $6,000 from their income.
– This helps older immigrants who may be living on fixed incomes.
What You Need to Do:
– File your state tax return and claim any deductions you qualify for.
– Keep records of your tips, overtime, and income if you plan to claim these deductions.
Implications for Pending and Future Applications
If you have already filed your 2024 taxes, these changes will not affect your current refund or tax bill. However, for the 2025 tax year (which you file in early 2026), you should:
- Review your eligibility for the New Jersey Earned Income Tax Credit, state child tax credit, and new deductions.
- Make sure you have an ITIN if you do not have a Social Security number. You can apply for an ITIN using IRS Form W-7.
- Gather documents showing your income, tips, overtime, and information about your children.
- Plan to file your state tax return even if your income is low or you think you don’t owe any tax. Filing is the only way to get these credits.
If you have a pending application for an ITIN or are waiting for tax documents, keep in mind that you must have your ITIN by the time you file to claim these credits.
Resources and Where to Get Help
- New Jersey Department of Treasury – Division of Taxation:
The official site has forms, instructions, and information about all state tax credits and deductions. Visit the New Jersey Division of Taxation for details. - Free Tax Preparation Services:
Many community organizations, advocacy groups, and the state itself offer free help with tax filing, especially for immigrants and low-income families. - Advocacy Groups:
Groups that work with immigrants can help explain these changes and make sure you get all the credits you deserve.
Future Outlook
New Jersey lawmakers and the Treasury are working to make tax benefits even more accessible. The NJEITC is set to increase to 40% of the federal EITC in 2026, which will mean even larger refunds for eligible families. Efforts to reach out to immigrant communities and reduce the number of unclaimed credits are ongoing.
Actionable Takeaways
- File your state tax return (NJ-1040) every year, even if your income is low.
- Use your ITIN if you do not have a Social Security number.
- Claim the New Jersey Earned Income Tax Credit and state child tax credit if you qualify.
- Take advantage of new deductions for tips, overtime, and seniors if they apply to you.
- Seek free help if you are unsure how to file or claim credits.
- Respond quickly to any requests from the state for more information.
By following these steps, immigrant families in New Jersey can make sure they receive all the tax benefits they are now eligible for in 2025 and beyond. For more information and official guidance, visit the New Jersey Division of Taxation.
These changes reflect a growing recognition of the important role immigrants play in New Jersey’s economy and communities. With expanded eligibility for the New Jersey Earned Income Tax Credit, the state child tax credit, and other deductions, more families can get the support they need to thrive.
Learn Today
NJEITC → New Jersey Earned Income Tax Credit providing a refundable tax credit based on federal EITC amounts to qualified residents.
ITIN → Individual Taxpayer Identification Number used by immigrants without Social Security numbers to file federal and state taxes.
Refundable Credit → A tax credit that can result in a refund if it exceeds the amount of tax owed.
Federal EITC → Federal Earned Income Tax Credit that offers tax relief to low- to moderate-income working individuals and families.
NJ-1040 → New Jersey Resident Income Tax Return form required to claim state tax credits and deductions.
This Article in a Nutshell
New Jersey expands 2025 state tax benefits, including Earned Income Tax Credit eligibility for ITIN filers and increased child tax credits. Immigrant families gain access to larger refunds and deductions, promoting greater financial support and inclusion in the state’s tax relief efforts starting January 1, 2025.
— By VisaVerge.com
