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Unemployment’s Impact on EITC Qualifications, Unspent CARES Act Funds Draw Attention of GOP Lawmakers

Providing state residents with much-needed financial support is top-of-mind for lawmakers in Trenton as 2020 draws to a close. This includes the impact of unemployment on earned income tax credit (EITC) qualifications, along with unspent CARES Act funding.

Due to the COVID-19 pandemic, job loss led many who received the EITC to file for unemployment. But unemployment compensation is not included as earned income for purposes of the federal credit. The state simply multiplies a taxpayer’s federal credit by 0.4 to determine the state credit.

A trio of Republican Assemblymen have introduced legislation that would provide anyone who qualifies for the EITC to receive the same amount of money this year as last year.

Pandemic & EITC

Sponsored by Brian Bergen (R-25), Hal Wirths (R-24) and John Catalano (R-10), A5090 would prevent a recipient’s check from being lower because they filed a lower earned income.  

“The earned income tax credit is the single most effective policy for lifting people out of poverty,” said Bergen. “That could be diminished because instead of receiving paychecks workers are receiving unemployment checks. The last thing families need is another loss of income they count on.”

The most recent income data, from 2017, shows that nearly 600,000 state residents filed for the EITC.  

Unfair Penalty

The lawmakers believe EITC recipients should not be penalized because unexpected job loss impacted their income levels.

“Anyone who would have received a larger check should get it,” said Wirths “It is not their fault that they were forced to take unemployment instead of working. They shouldn’t face the consequences. People are struggling and we need to help any way we can.”

An estimated 31% of businesses located in New Jersey have shut down due to the pandemic.

“The bill will make sure people do not lose state tax benefits on top of all the other money they have lost,” said Catalano. “A substantial amount of people have been laid off this year. It is important we make sure people have the money to feed their families and keep a roof over their heads.”

Unspent CARES Act Funds

Nearly $200 million in CARES Act funds provided to the state remain unallocated. The deadline for spending or returning these grants is Dec. 30. State Sen. Steve Oroho (R-24) wants to see these funds invested into helping residents recover.

He has requested action from Gov. Phil Murphy. In his letter to the governor, Oroho urges him to prioritize remaining funds to help nonprofit organizations and small businesses as they continue to struggle due to the pandemic’s impact on our economy.

“To date, you have been unwilling to remove artificial caps on nonprofit and business assistance grant programs, including both caps on employer size as well as dollar caps on assistance, that have prevented critical relief funds from getting out the door quickly to the benefit of employers, employees, and the customers they serve,” wrote Oroho.

NJBIA Proposal

And, if this cannot be done, State Sen. Oroho encouraged the governor to consider a proposal from the New Jersey Business and Industry Association (NJBIA). If any grant funds remain unused, the NJBIA requested that they be deposited into the Unemployment Insurance Fund to mitigate tax increases on employers which will otherwise hit businesses, nonprofits, and local governments and property taxpayers.

“Though I continue to believe that using all available funds for the direct support of nonprofit organizations and small businesses impacted by COVID-19 should remain the emergent priority, I support the NJBIA’s proposal as a backstop,” said Oroho.

Daily Data

As of Dec. 21, the cumulative number of coronavirus cases in New Jersey reached 435,763 with 4,319 total new cases reported and 29 new deaths, bringing that total to 16,315. The state listed probable deaths at 1,908, bringing the overall total to 18,223.

For North Jersey counties, Bergen had a total of 240 new cases, Essex 226 new cases, Hudson 224 new cases, Passaic 199 new cases, Morris 188 new cases, Warren 58 new cases and Sussex 52 new cases.

State officials noted 56 deaths occurred in the last 24 hours of reporting that have not yet been lab confirmed.  

Of the total confirmed deaths in North Jersey, Essex County has the most with 2,092, followed by Bergen at 1,992, Hudson with 1,499, Passaic at 1,249, Morris at 761, Warren County at 166 and Sussex at 165.

In regards to probable deaths, Bergen has 256, Essex has 239, Hudson has 161, Morris at 170, Passaic at 146, Sussex has 42 and Warren has 13.

State Testing 

The daily rate of infections from those tested as of Dec. 17 was 10.8%; by region, the rate was 8.9% in the North, 10.4% in the Central region and 14.2% in the South. The state is no longer using serology tests as health officials explained those results show a past presence of the disease as well as a current one. 

As for the rate of transmission, it decreased to 0.99 from 1.00 the day before. Officials have continually cited transmission rate and positivity rate as health data they rely on to track how the coronavirus is being contained in New Jersey, guiding them in determining when restrictions have to be tightened or lifted.

Officials reported 3,607 patients were hospitalized, with 3,371 confirmed cases and 236 under investigation. By region, there were 1,619 in the North, 1,167 in the Central and 821 in the South.

Of those hospitalized, 727 are in intensive care units and 481 on ventilators. While 306 patients were discharged, 376 were admitted.

Essex Tops County Count

Essex has the most cumulative cases in the state with 44,015, followed by Bergen at 43,370, Middlesex at 40,626, Hudson at 39,991, Passaic at 37,685, Union at 34,388, Ocean at 28,936, Monmouth at 28,237, Camden at 25,955, Burlington at 18,654, Morris at 18,307, Mercer at 17,450, Gloucester at 12,600, Somerset at 11,589, Atlantic at 10,767, Cumberland at 6,903, Sussex at 3,800, Warren at 3,471, Hunterdon at 3,376, Salem at 2,405 and Cape May at 2,159.

Another 1,079 cases are still under investigation to determine where the person resides.

In regards to cases related to in-school transmissions, a total of 98 outbreaks involving 428 cases have been reported in 19 of the 21 counties in the Garden State, with 10 new outbreaks involving 40 cases recorded in the last week. For North Jersey, Bergen County has 18 confirmed outbreaks with 86 cases, Passaic County has four confirmed outbreaks with 23 cases, Warren County has four confirmed outbreaks with nine cases, Sussex County has three confirmed outbreaks with seven cases and Hudson County has two confirmed outbreaks with 10 cases. 

Long-term Care Facilities

Health officials noted 414 long-term care facilities are currently reporting at least one case of COVID-19, accounting for a total of 9,951 of the cases, broken down between 4,637 residents and 5,314 staff. 

Cumulatively, 1,124 long-term care facilities reported a case infecting 28,753 residents and 18,070 staff, for a total of 46,823 cases. 

The state’s official death total will now be reported as those that are lab confirmed, sits at 7,437 on Dec. 21. The facilities are reporting to the state 7,161 residents deaths and 124 staff deaths.

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