CT Earned Income Tax Credit

• A CT EITC will build on the benefits of the federal EITC.

• Connecticut is the only state in New England with an income tax that has not adopted a state EITC.
• Enacted in 1975 under President Ford, the EITC is supported by Republicans and Democrats. President Reagan called the EITC “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.” Twenty-two states and the District of Columbia have enacted EITCs under governors from both parties.

• Connecticut is the state with the third largest disparity in income. A state EITC will help reduce this growing divide.
• In Connecticut, workers at the bottom earning less than $21,000 paid more than twice the tax rate (income, sales, excise, property) than the top 1% of workers earning more than $500,000. A CT EITC will provide tax relief for the state’s lowest earners.

• In tax year 2005, 165,000 Connecticut households claimed the federal EITC, returning $274 million to low-wage earners and the local economy. A CT EITC, pegged at 20% of the federal credit, will put $59 million back to the state’s economy.

• Families could use the CT EITC to pay off debt, finance transportation to work, invest in education, buy basic necessities, pay for health care, or save to build assets. Depending upon income, working families could receive the federal maximum credit of $4,716 and a maximum state credit of $943.

• Therefore, it is not subject to the constitutional spending cap. It is a bold, but affordable step that lawmakers can take to spur job growth, stimulate the economy, and reduce poverty.

Text courtesy Connecticut Association of Human Services.

Resources on CT Earned Income Tax Credit

Fact Sheets EITC 2008 pdf Federal EITC by CT House Districts pdf Federal EITC by CT Senate Districts pdf Websites Connecticut Association of Human Services Connecticut Voices For Children ONE Connecticut

Public Hearings and Forums Public Hearing on CT EITC 21 February 2008 Budget Forum: CT Families in the YOYO Economy 26 February 2008

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