The state also extended its EITC to immigrant workers who file taxes using an Individual Taxpayer Identification Number (ITIN) and previously expanded it to workers without children in the home aged 18 through 24.
FORMS TO GO WITH EITC FULL
They increased the credit to 50 percent of the federal credit, with full refundability. Maryland lawmakers enacted possibly the most robust, albeit temporary, enhancements to their state-level EITC. Even in its enhanced form, the federal CTC continues to leave behind non-citizen children. The credit will be available to children who do not have Social Security numbers (a requirement that limited the CTC’s reach under the Tax Cuts and Jobs Act). The higher credit amount is coupled with an age expansion, lowering eligibility to permanently include adults without children in the home who are between the ages of 19 and 24.Ĭolorado also funded a targeted state-level child tax credit (CTC) for single filers making less than $75,000 and joint filers making less than $85,000. The credit will temporarily increase even further (to 25 percent) between 20, before reverting to a 20 percent credit in 2026. Increased Credits: More of a Good ThingĬolorado increased its state-level EITC to 20 percent (up from 15 percent) starting in 2022. This limits the ability of the credit to offset the Show-Me State’s regressive state and local taxes and should be reformed in the years ahead. While this is a major policy success, the state credit is non-refundable and lower-income taxpayers will not receive a refund for the portion of the credit that exceeds their income tax bills. Missouri will join 29 other states, the District of Columbia, and Puerto Rico in offering such a credit. In Missouri-following 25 years of sustained advocacy-organizers and beneficiaries celebrated the legislature’s passage of a state-level EITC, set to go into effect in 2023. The state’s Working Families Tax Credit is modeled after the federal EITC and enhanced through added improvements: the inclusion of immigrant families and effectively eliminating the phase-in so that all families with any amount of earned income can qualify for the full value of the credit. But it wasn’t until this year that lawmakers took steps to improve its structure and fully fund its implementation. Washington state has had an Earned Income Tax Credit (EITC) on the books since 2008. Here is a summary of those changes and a celebration of those successes. To that end, lawmakers across the country have made strides in enacting, increasing, or expanding tax credits that benefit low- and middle-income families. The richest among us grow richer by the day, but far too many families cannot make ends meet.įortunately, a growing group of state lawmakers are recognizing the extent to which low- and middle-income Americans are struggling and the ways in which their state and local tax systems can do more to ensure the economic security of their residents over the long run.
Even as the nation recovers from the COVID-19 pandemic, we cannot turn away from the inequities on which it shone a bright light.
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