As families with low incomes work hard to make ends meet — paying for food, housing, and child care — one popular, bipartisan policy that helps is the Earned Income Tax Credit (EITC). The credit reduces families’ tax bill or gives families a refund so that they have more cash.
It’s an approach that has had a positive local impact, according to a brief from the Massachusetts Budget and Policy Center (MassBudget), “The Reach of the Massachusetts State Earned Income Tax Credit, by City and Town.”
“More than 400,000 tax filers claim the Massachusetts state EITC each year. In Fiscal Year 2019, the state’s Administration currently estimates tax filers will receive a total of $214.1 million in credits,” MassBudget explains.
EITC has been especially important because workers’ wages have been stagnant for several decades.
MassBudget has created an interactive map that draws on KIDS Count data to show EITC usage across Massachusetts. The full Massachusetts map as well as a table of city and town level data is available here.
Last month, the Salem News editorial board called for an expansion of EITC, writing:
“If lawmakers are serious about helping low- and middle-income families — especially those with children — there is a proven way to do it: Expand the state’s Earned Income Tax Credit.
“Gov. Charlie Baker proposed as much in his 2019 budget plan unveiled last month. Baker would raise the credit to up to 30 percent of what qualifying workers claim on earned income credits on their federal tax returns. The current level sits at 23 percent, up from 15 percent two years ago.”
“The sticking point, as always, is how to pay for the program. The Baker administration estimates pushing the credit to 30 percent would cost the state about $65 million a year.”
“Baker’s plan would give state lawmakers some time to come up with a way to pay for the expansion — the move to 30 percent wouldn’t go into effect until the 2020 tax year.
“That should be plenty of time to come up with a bipartisan solution. It’s time to get to work.”
Families need the support.