The working poor would get a break from one of the tax proposals in Gov. Ned Lamont's budget, to be formally presented next month.
The move, announced Monday at the Wilson-Gray YMCA in Hartford, would raise the state's earned income tax credit to 40% of the federal level (from 30.5%), at a total cost of about $45 million. For most qualified families, that would add hundreds of dollars to a credit that can range into the thousands.
More than 200,000 Connecticut families, generally making less than $60,000 per year, claim the earned income tax credit.
"These are people who are working every day, sometimes working double jobs, doing what they can to get by," says Lamont. "I need these folks working, I need our essential workers, I need people in the workforce. The earned income tax credit gives you one more reason to do that."
Labor unions and advocates for the poor call the upgraded tax credit a "start." They're looking for more help for families in the new budget.
"Putting $45 million back in the hands of some of the poorest people in our state, folks who are working every single day in an economy that just does not empower low-wage workers to be able to meet their needs, government action is absolutely necessary," says Rob Baril, president of SEIU 1199 New England. "We need a lot more of it in this budget."
"Connecticut, unfortunately, has some of the most extreme racial, economic and gender inequities in the country," says Puya Gerami, director of Recovery for All, "and those are inequities that have only been exposed and exacerbated during this pandemic."
There is at least one more item in the upcoming budget that advocates can count on: Lamont plans a middle class income tax cut. The budget is subject to lawmakers' approval.
Commissioner of Revenue Services Mark Boughton says the higher credit will be easy to claim. He says taxpayers should just fill out their state form as they usually do: "They'll see a check-off there. It's pretty simple. It's probably one of the easiest tax credits you can get if you qualify for the federal tax credit."
The increased state tax credit would take effect for the 2023 tax year (forms to be filed in 2024).
