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Lawmakers in Massachusetts Look to Expand EITC
Lawmakers in Massachusetts are considering an increase to the state Earned Income Tax Credit (EITC) that would raise the credit from 23 percent to 50 percent of the federal level.
The EITC is often described as one of the most effective anti-poverty tools available, because it's a refundable tax credit that flows directly to working low-income citizens. It rewards work, increases economic mobility, reduces inequality, and improves children's health.
In 2015, policymakers in Massachusetts increased the EITC from 15 percent to 23 percent of the Federal EITC amount. While this is a step in the right direction, more can be done. In 2013, 406,000 working tax filers claimed the Massachusetts EITC, and in 2010, 77 percent of those eligible received the benefit. These figures display the need for the EITC and the resource it has become for working families.
Common Sense Kids Action supports the state-based EITC policy, because the policy offers a cash-back tax credit available to qualifying low- and moderate-income working individuals and families. Evidence from the federal EITC shows that it helps recipients improve their economic stability and that kids from recipient families perform better in school.
Building on the FY16 increase to the state EITC, we recommend a further increase from 23 percent to 50 percent of the value of the federal EITC for all eligible recipients, giving Massachusetts the highest rate in the country.
Common Sense Kids Action is proud to join the Healthy Families Coalition in supporting a 27 percent raise to the state Earned Income Tax Credit.