Earned Income Tax Credit (EITC)

Rate (Non-Refundable): 5% of the federal credit1

Eligibility Requirements: All Oklahoma taxpayers who qualify for the federal credit are automatically eligible.

Latest Legislative Action: During the 2017 legislative session, lawmakers introduced bills that would restore refundability to the state’s EITC, reversing legislation that eliminated this feature in May 2016.

Notes: Oklahoma’s EITC faced elimination after the governor and legislature created two state task forces to consider state tax credits and comprehensive tax reform in 2011. The Task Force on Comprehensive Tax Reform recommended eliminating the EITC, but the legislature did not end up passing any proposals to do so.

Child Tax Credit (CTC)

Rate (Non-Refundable):2 Eligible families may claim either 5% of the federal CTC or 20% of the federal CDCTC, whichever is greater.

Eligibility Requirements: All Oklahoma taxpayers who qualify for the federal credit are automatically eligible.

Notes: In 2012, Gov. Mary Fallin announced a plan to steeply reduce income tax rates, and pay for it by eliminating many credits and deductions, including the CTC. However, the legislature did not pass any tax reform legislation that year and a 2013 tax package left all credits for working families untouched.

Child and Dependent Care Tax Credit (CDCTC)

Rates (Non-Refundable):3 Eligible families may claim either 5% of the federal CTC or 20% of the federal CDCTC, whichever is greater.

Eligibility Requirements: All Oklahoma taxpayers who qualify for the federal credit are automatically eligible.

Notes: In 2012, Gov. Mary Fallin announced a plan to steeply reduce income tax rates, and pay for it by eliminating many credits and deductions, including the CDCTC. However, the legislature did not pass any tax reform legislation that year and a 2013 tax package left all credits for working families untouched.

Oklahoma Tax Credits In The News

10

Oct 17

News Round-Up: October 10, 2017

U.S. Senators Tammy Baldwin (D-WI) and Cory Booker (D-NJ) released a new tax plan, the Stronger Way Act, which includes an expansion of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) to benefit low-income Americans. Specifically, the plan would grow the size of the existing EITC, expand the credit for workers without dependent children, make the CTC refundable and grow the size of the credit.
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8

May 17

News Round-up: May 8, 2017

Last year, Oklahoma’s legislature voted to make its Earned Income Tax Credit (EITC) nonrefundable. Now, lawmakers are considering a bill to make 50% of the credit refundable.
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For More State Information:

David Blatt
Oklahoma Policy Institute
www.okpolicy.org
(405) 601-7692
dblatt@okpolicy.org

Sources:
  1. Resident Individual Income Tax Forms and Instructions, Oklahoma Tax Commission
  2. Ibid.
  3. Ibid.