ASSEMBLY, No. 546

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblywoman TURNER

An Act requiring the notification of certain persons of the availability of the federal earned income tax credit, supplementing chapter 21 of Title 43 of the Revised Statutes, chapter 1 of Title 30 of the Revised Statutes, P.L.1966, c.293 (C.52:27D-1 et seq.), and P.L.1948, c.92 (C.52:18A-1 et seq.) and amending N.J.S.54A:7-2.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. (New section) The Commissioner of Labor shall notify in writing any person who received unemployment compensation pursuant to R.S.43:21-1 et seq. of the availability of the earned income tax credit provided in section 32 of the federal Internal Revenue Code of 1986, 26 U.S.C. §32. The written notification shall use the statement developed by the State Treasurer pursuant to section 4 of P.L. , c.     (C. )(now pending before the Legislature as this bill) for this purpose. The notification shall be distributed in a manner deemed by the commissioner to be the most practicable and cost effective, but that will ensure personal notification of each person. The notification shall be distributed between January 1 and February 15 of each calendar year following the calendar year in which the person received the unemployment compensation.

    2. (New section) The Commissioner of Human Services shall notify in writing any person over 18 years of age of the availability of the earned income tax credit provided in section 32 of the federal Internal Revenue Code of 1986, 26 U.S.C. §32, if the person:

    a. received food stamps under the Food Stamp Program authorized by Title XIII of the Food and Agriculture Act of 1977, Pub. L. 95-113 (7 U.S.C. §2011 et seq.);

    b. received assistance under the "General Public Assistance Law," P.L.1947, c.156 (C.44:8-107 et seq.);

    c. received assistance from the program for aid to families with dependent children, P.L.1959, c.86 (C.44:10-1 et seq.);

    d. participated in the New Jersey Medical Assistance and Health Services Program, P.L.1968, c.413 (C.30:4D-1 et seq.);

    e. received aid under the Supplemental Security Income Program established pursuant to Title XVI of the federal Social Security Act, 42 U.S.C. §1381 et seq.; or

    f. was a foster parent as defined in P.L.1951, c.138 (C.30:4C-1 et seq.).

    The written notification shall use the statement developed by the State Treasurer pursuant to section 4 of P.L. , c. (C. )(now pending before the Legislature as this bill) for this purpose. The notification shall be distributed in a manner deemed by the commissioner to be the most practicable and cost effective, but that will ensure personal notification of each person. The commissioner shall take such reasonable actions as may be necessary to avoid the distribution of more than one notice to a person who was the recipient of or participated in two or more of the programs listed in this section. The notification shall be distributed between January 1 and February 15 of each calendar year following the calendar year in which the person was a recipient or participant, or foster parent. If the recipient, participant or parent was a married couple, only one notice addressed to either the husband or wife, or both, shall be required.

    3. (New section) The Commissioner of Community Affairs shall notify in writing any person who received rental assistance under the program authorized pursuant to section 8 of the United States Housing Act of 1937 as added by the Housing and Community Development Act of 1974, Pub. L. 93-383 (42 U.S.C. §1437f) of the availability of the earned income tax credit provided in section 32 of the federal Internal Revenue Code of 1986, 26 U.S.C. §32. The written notification shall use the statement developed by the State Treasurer pursuant to section 4 of P.L. , c. (C. )(now pending before the Legislature as this bill) for this purpose. The notification shall be distributed in a manner deemed by the commissioner to be the most practicable and cost effective, but that will ensure personal notification of each person. The notification shall be distributed between January 1 and February 15 of each calendar year following the calendar year in which the person or couple received the assistance. The commissioner shall consult annually with the Commissioner of Human Services in an effort to take such reasonable actions as may be necessary to avoid the distribution of more than one notice to a person who is eligible to receive a notice under this section and section 2 of P.L. c. (C. )(now pending before the Legislature as this bill). If the recipient of the assistance was a married couple, only one notice addressed to either the husband or wife, or both, shall be required.

    4. (New section) The State Treasurer shall develop a written statement informing a recipient of the availability of the earned income tax credit under the provisions of section 32 of the federal Internal Revenue Code of 1986, 26 U.S.C. §32, for distribution pursuant to sections 1, 2 and 3 of P.L. , c. (C. )(now pending before the Legislature as this bill) and subsection b. of N.J.S.54A:7-2.

    5. N.J.S.54A:7-2 is amended to read as follows:

    54A:7-2. a. Every employer or payor of a pension or annuity required to deduct and withhold tax under this act from the wages of an employee or from the payment of a pension or annuity, or an employer who would have been required so to deduct and withhold tax if an employee had claimed no more than one withholding exemption, shall furnish to each such employee, or pension or annuity recipient or the estate thereof, in respect of the wages or pension or annuity payments paid by such employer or payor to such employee or pension or annuity recipient during the calendar year on or before February 15 of the succeeding year, or, if his employment or pension or annuity is terminated before the close of such calendar year, within 30 days from the date on which the last payment of the wages or pension or annuity is made, a written statement as prescribed by the director showing the amount of wages or pension or annuity payments paid by the employer or payor to the employee or pension or annuity recipient, the cost of commuter transportation benefits, as defined pursuant to section 3 of P.L.1992, c.32 (C.27:26A-3), excludable by the employee pursuant to section 1 of P.L.1993, c.106 (C.54A:6-23), and the cost of such benefits not so excludable, provided by the employer to the employee, the amount deducted and withheld as tax, the amount deducted and withheld as worker contributions for unemployment and disability insurance as provided under the New Jersey Unemployment Compensation Law, and such other information as the director shall prescribe.

    b. In addition to the statement furnished pursuant to subsection a. of this section, each employer shall notify an employee in writing of the availability of the earned income tax credit under the provisions of section 32 of the federal Internal Revenue Code of 1986, 26 U.S.C. §32. The written notification shall use the statement developed by the State Treasurer pursuant to section 4 of P.L. , c. (C. )(now pending before the Legislature as this bill) for this purpose. The employer shall notify only those employees whom the employer knows, or reasonably believes, may be eligible for the credit based on the wages reported on the statement distributed pursuant to subsection a. of this section.

(cf: P.L.1993, c.108, s.2)

    6. This act shall take effect immediately.

STATEMENT

    This bill requires public and private employers and the Commissioners of Labor, Human Services and Community Affairs to notify annually certain individuals of the availability of the federal earned income tax credit.

    The federal earned income tax credit is available to a qualifying low-income worker to reduce the amount of the worker's federal income tax liability; any credit in excess of tax owed is refundable to the worker. A low-income worker may receive a refund of the credit even if the worker does not owe any federal income tax. For tax years beginning in 1994, the federal earned income tax credit will be available to a qualifying low-income worker between 25 and 65 years of age regardless of whether there are one or more qualifying children in the worker's household. Prior to 1994, the credit was available only if a low-income worker had one or more qualifying children. The credit is generally based on the income earned by a taxpayer from working for someone else or from self-employment.

    This bill requires all public and private employers to notify potentially eligible employees of the availability of this credit when the employer gives the employee the statement of wages and tax withholding already required under current law. A determination of potential eligibility will be based on the wages for the prior year reported in the statement.

    In addition, the Commissioner of Labor will notify all persons who received unemployment compensation; the Commissioner of Human Services will notify persons who were recipients of food stamps, general assistance, aid to families with dependent children, supplemental security assistance, or Medicaid, or who were foster parents; and the Commissioner of Community Affairs will notify persons who received assistance under the federal rental assistance program administered by the department.

    The notification will be distributed between January 1 and February 15 of each year to coincide with the employer's distribution of the wage and tax withholding statement.

Requires notification of certain persons of availability of federal earned income tax credit.