HARTFORD, Conn. — Gov. Ned Lamont announced a legislative proposal Monday to increase a tax credit aimed at providing relief for low-income workers.
The plan is to increase Connecticut's Earned Income Tax Credit (EITC) from the current rate of 30.5% to 40% of the federal level.
"The Earned Income Tax Credit is just one more way of giving people incentive to get back to work and help them keep more of what they earn," Lamont said during Monday's press conference at the Wilson-Gray YMCA Youth and Family Center in Hartford.
The EITC is a credit against the state’s income tax and is fully refundable, meaning families can still receive it even if they don’t pay the state income tax.
Lamont said increasing the rate would provide an additional $44.6 million in state tax credits to over 211,000 qualifying low-income households. Typically, families with children receive more than 95% of all EITC dollars.
"An additional percentage on the Earned Income Tax Credit will make a real difference to families all across our state," Hartford Mayor Luke Bronin said.
Right now the credit provides around $144 million in tax breaks to families, but this increase would up the relief an additional $45 million to around $190 million for more than 211,000 eligible households.
"If you put money back into the pockets of families, it will be spent in the community," Lt. Gov. Susan Bysiewicz said.
The administration says with this increase families could see anywhere from $200 to 700 extra a year.
Increasing the rate to 40% will make Connecticut among the top five states in the nation with the largest EITC rates. Neighboring states of Massachusetts, New York and Rhode Island offer credits of 30 and 15%, respectively.
This proposal is one of several tax relief measures the governor will include in his upcoming annual budget address to the General Assembly Wednesday, February 8, at noon.
Earlier in January, Lamont announced the budget proposal would also include a plan to destroy the pass-through entity tax credit to its original level, which enables small business owners to save money. Lamont also plans to announce additional tax relief measures, including those targeted toward middle-class workers.
The federal income eligibility requirements for 2022 are:
- No dependents: $16,480 for individuals and $22,610 for married filing jointly
- One dependent: $43,492 for individuals and $49,622 for married filing jointly
- Two dependents: $49,399 for individuals and $55,529 for married filing jointly
- Three dependents: $53,057 for individuals and $59,187 for married filing jointly
Jennifer Glatz is a digital content producer at FOX61 News. She can be reached at firstname.lastname@example.org.
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