Last year, working families in Connecticut were able to file for a state earned-income tax credit (EITC) for the first time – and according to a new analysis released by the Fiscal Policy Center at Connecticut Voices and the Connecticut Association for Human Services, the credit has been a resounding success. The analysis, based on data prepared by the state Department of Revenue Services, makes a strong case for the credit. More than 180,000 households in our state received the credit, equal to 30 percent of a filer’s federal EITC amount. There are EITC recipients in each of Connecticut’s 169 cities and towns – urban and rural, from Westport to Willimantic. Most importantly, the credit gave a boost of about $600 to working families with an average annual income of about $18,000 – about what a single parent working full-time just above minimum wage would earn in a year.
As the Governor and the legislature set out to close another large budget gap, they should avoid cutbacks in the state EITC. Now is not the time to raise taxes on the lowest-income working families in our state – cutting the credit in half would amount to a $300 tax hike for these households. The state EITC keeps money flowing in local economies, improves the fairness of our state’s tax code, and most importantly, helps working people make ends meet. Hundreds of thousands of Connecticut residents lived in a household impacted by the EITC last year – and they depend on a robust, full-refundable credit in the coming years.
Bonus: For specifics on your town, see our town data sheet. Also available are 169 one-page handouts for each town.