Baker will push to further expand earned income tax credit

Charlie Baker

BOSTON (STATE HOUSE) – With the stroke of his pen, Gov. Charlie Baker on Wednesday did what he called “something nice for 400,000 people.”

Flanked by Lt. Gov. Karyn Polito, Senate President Stanley Rosenberg and a bipartisan group of legislators, Baker signed into law a 50 percent increase in the state’s earned income tax credit, which could mean as much as a $500 more from the tax credit for an eligible low-income family.

Though the bill signed Wednesday increases the state earned income tax credit from 15 percent to 23 percent of its federal counterpart, Baker said he plans to push for another increase in the tax credit, to 30 percent of the federal level.

“I consider today to be half of what we need to do on this, and I look forward to coming back and working with the Legislature and all the folks behind us to get the next half done,” said Baker, who called for a doubling of the earned income tax credit on the campaign trail. “This is the least we can do for the 400,000 families here in the Commonwealth of Mass who qualify for this program.”

The bill, which boosts the maximum state credit from $951 to $1,459, was enacted as part of the state budget agreed to by the House and Senate.

“This is a great example of what shared leadership can accomplish,” said Rosenberg, who was a co-author of the original earned income tax credit legislation in 1997. “Today, we are speaking and acting on behalf of 415,000 families in providing them, these hardworking families, the opportunity to do just a little better through the tax code. It’s shared prosperity and shared opportunity being brought to life here in the Commonwealth today.”

The state’s earned income tax credit is available to “certain low-income individuals who have earned income” and meet the requirements for the federal tax credit, according to the state Department of Revenue. To qualify for the federal credit, a taxpayer must have worked full- or part-time during the tax year and earned income below a certain threshold.

In 2014, an individual filer who has no children and earned less than $14,590 qualified for a federal credit of $496 and then a state credit of $74.74, according to DOR. For each additional child, up to a total of three, the gross income threshold and tax credit amount increases.

The issue of income inequality has been an underlying theme of legislation and debate at the State House. Last year, former Gov. Deval Patrick signed into law a three-step increase in the minimum wage to $11 per hour by 2017 and in November voters approved a ballot question that mandates employers to offer earned sick time. A committee hearing on legislation aimed at strengthening the state’s gender pay equity law drew a large crowd of supporters to the State House last month.

“Increasing the earned income tax credit will strengthen the Legislature’s existing efforts to close the income gap and provide unrivaled support for hardworking families,” House Speaker Robert DeLeo said in a statement. “It is my belief that these changes will reinvigorate our work to achieve economic equality.”

Since its enactment in 1975, the Brookings Institute reported last month, the federal earned income tax credit has been “one of the country’s most effective antipoverty programs” and “keeps millions of individuals and children out of poverty each year, reducing the national poverty rate by several percentage points.”

Copyright 2015 State House News Service

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