CT retroactively increases earned income tax credit for ’20


Connecticut officials will retroactively increase the state’s earned income tax credit for 2020 from 23 percent of the federal credit to 41.5 percent, a change that could translate into hundreds or even more than a thousand dollars in new credits for low to moderate income households.

Gov. Ned Lamont on Wednesday announced he has tasked the state’s tax services department to enact the change, which is expected to benefit 198,708 households who earned up to $ 56,844 in 2020 and filed for the EITC of this year.

The scale of improvement given to each household is tested for needs and depends on the size of its federal credit, which the Internal Revenue Service calculates based on taxpayer income, marital status, and number. of eligible children.

A single parent of two children at the federal poverty line who received a state credit of $ 1,246 in the spring, for example, would now receive an additional $ 1,002 for a total state credit of $ 2,248.

The state will use federal pandemic relief money to make up for the $ 75 million in revenue it will lack, officials said.

In a statement, Lamont said the retroactive improvement is needed to help low to moderate income individuals and families who have been disproportionately affected by COVID-19 and its resulting economic fallout.

“Improved Connecticut 2020 Earned Income Tax Credit offers direct relief to workers doing their best to support their families while facing pandemic costs, masks and testing child care and Internet access, ”Lamont said. “The recent bipartisan budget increased this credit in the future, as numerous studies show it to be one of the best anti-poverty tools we have. The EITC encourages work, strengthens economic stability and uplifts future generations. Ultimately, these tax credits improve entire communities because those dollars are reinvested in our local economy.

The Department of Revenue Services plans to issue checks for additional credit to eligible households before the end of February.

The state labor income tax credit has hovered between 23% and 30% since its inception in 2011. The rate was recently increased to 30.5% as part of the 2022 biennial state budget. -2023 signed by Lamont in June.

Source link


About Author

Comments are closed.