Louisiana Expands EITC

By Devin Simpson

Louisiana Governor John Bel Edwards (D) has signed legislation to increase the state’s Earned Income Tax Credit (EITC) from 3.5 to 5 percent of the federal credit.

The bill’s passage comes after years of hard work by the Louisiana Budget Project (LBP) and other advocates to expand the state’s EITC; one of the smallest state-level credits in the country. Since the credit’s enactment in 2007, several bills to increase its size have worked their way through the legislature but failed to make it to the governor’s desk. The success of this expansion is credited to Democrats – particularly members of the Legislative Black Caucus  –  who refused to support a sales tax renewal without a way to offset its burden on low-income workers.

According to LBP, nearly one in three Louisiana households claim the state’s EITC. “Low-income families tend to spend everything that comes in their paycheck, and so they spend a higher percentage of their income on sales taxes than a family that makes a couple of hundred thousand dollars a year,” LBP executive director Jan Moller told New Orleans Public Radio. “Expanding the EITC is a way to get some relief, some of that money back to low-income working families who need the tax relief the most.”

Louisiana is one of 29 states that offer a state-level EITC on top of the federal credit. For more information on Louisiana’s credit, as well as other state-level EITCs across the country, visit our 50-state map here.