Mid-Session Update: State EITCs Are on the Move
March 17, 2017Print
During 2016, states considered more than 170 bills related to the Earned Income Tax Credit (EITC). Now, at the mid-point in most state legislative sessions, it’s already clear that the EITC may be even more popular in 2017, with many states considering creating, expanding, or making refundable EITC programs. Here are some of the states where the EITC is on the move:
- In Georgia, lawmakers are working on a tax reform bill that would create a state EITC worth 10 percent of the federal credit. However, this bill would also institute a flat income tax, which would cut taxes for the wealthiest Georgians and disproportionately hurt low-income workers and families.
- A bill to create a Montana EITC cleared major legislative hurdles as it was voted out of the House Committee on Taxation and recently passed by a full vote on the House floor. Meanwhile, a companion bill continues to make its way through Senate committees.
- Legislators in South Carolina are considering bills in the House and Senate that would establish a state-level EITC. The House version would create a refundable credit worth 3 percent of the federal credit, and the Senate bill creates an EITC worth 20 percent of the federal.
- For the second year in a row, legislators in Maryland are debating a bill that would allow younger workers to receive the state EITC and expand the credit for childless workers.
- The Utah legislature is working on creating the “Utah Intergenerational Poverty Work and Self-Sufficiency Tax Credit,” an EITC-like credit that will help end the cycle of poverty.
- In Hawaii, Missouri and West Virginia, several bills have been introduced to create state-level EITCs and all await committee votes. Legislation was introduced in Nebraska that would double the state’s EITC to 20 percent of the federal credit by 2021 and Wisconsin Gov. Scott Walker (R) announced a plan that would expand the state’s EITC for families raising just one child from 4 percent to 11 percent of the federal credit.
- The Oklahoma legislature continued to debate four bills that would restore the state EITC’s refundability, which was stripped away last legislative session.
Meanwhile, Arkansas lawmakers voted down a bill that would have created a Working Families Opportunity Tax Credit, a program similar to the EITC, and Connecticut Gov. Dannel Malloy (D) has proposed reducing the state’s EITC to 25 percent of the federal credit.
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