Gov. proposes tax relief for low-income workers
HARTFORD, CT (WFSB) - Tax relief for low-income workers was proposed by the Lamont Administration.
Gov. Ned Lamont participated in a news conference Monday at noon to announce the proposal.
The plan is to increase Connecticut’s Earned Income Tax Credit (EITC) from the current rate of 30.5 percent of the federal credit to 40 percent.
Lamont said increasing the rate will provide an additional $44.6 million in state tax credits to approximately 211,675 qualifying low-income households, above the amount they currently receive under the program. Typically, families with children receive more than 95 percent of all EITC dollars.
“Increasing this tax credit is one of the most impactful things we can do to target direct relief to low-income workers who are providing for their families, especially those with children,” Lamont said. “Numerous studies have shown that the EITC is one of the best anti-poverty tools we can use because it encourages work, boosts economic stability, and uplifts generations to come. Ultimately, this tax credit helps improve entire communities because these dollars are being invested right back into our local economy through groceries, transportation, clothing, rent, utilities, and other necessary expenses. The EITC encourages work and boosts economic stability, and I think it’s about time that we increase it.”
The Connecticut EITC is a refundable state income tax credit for low income working individuals and families that mirrors the federal EITC. The federal income eligibility requirements for 2022 were:
- 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
The governor said he plans to announce additional tax relief measures, including those targeted toward middle-class workers, in the coming days.
Lamont applauded the advocacy of Senate President Pro Tempore Martin M. Looney, who championed the creation of Connecticut’s EITC in 2011 and whose support has ensured that it has remained a component of every state budget that has been enacted since its conception.
“Connecticut’s Earned Income Tax Credit helps approximately 211,000 Connecticut taxpayers and their families,” Looney said. “The passage of this tax credit in 2011 was a testament to the importance of Democratic leadership after years of being stymied by Republican governors. We can say we want to help people out of poverty, but the EITC is one of the ways to actually accomplish that goal. The EITC is an important piece of a Democratic budget and I want to thank Governor Lamont for including it as a priority.”
Earlier this month, the Lamont announced a proposal to restore Connecticut’s pass-through entity tax credit to its original level of 93.01 percent.
It also would enable small business owners in the to save money by claiming a larger credit on their personal returns.
The recommendation, as well as several others, will be a part of the governor’s fiscal budget proposal for 2024 and 2025. He said he’ll present it to the state’s General Assembly in February.
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