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Briefing Sheet:
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| EARNED
INCOME TAX CREDIT |
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FACTS
- The EITC helps low-wage families
earning up to approximately $15,000, depending
upon family size.
- 309,406
families in Maryland claimed the Earned Income
Tax Credit for tax year 1999.
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Recommendations:
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| Increase
the State's refundable Earned Income
Tax Credit (EITC) from the current 15%
of the Federal EITC to 20% |
| Action: |
| Urge
the Governor and legislators to support
SB 166 and HB 222 |
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Relevant Committees:
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House Ways and Means, Semate Budget
and Taxation
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BACKGROUND
- In 1998,
Maryland enacted a refundable state earned income
tax credit, which is currently equal to 15%
of the amount of a taxpayer's federal credit.
- The refundable
credit is currently available to low-wage taxpayers
with children, and it supplements their wages
by refunding a portion of their federal taxes.
- At the
current level, a parent with two children earning
$10,300 per year would receive a tax credit
of $581. Under the proposed increase to 20%,
that amount would go up to $782.
- Expansion
of the EITC to 20% will allow low-income families
to increase their earnings and afford them an
opportunity to move beyond poverty towards economic
self-sufficiency.
- The EITC can make a real difference
in the lives of many low-income workers by increasing
their financial stability. It serves the purpose
of reducing taxes, supplementing wages and making
work pay.
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| For more information
on how to get involved, contact Tracy
Newsome-Smith at 410- 366-0600, x111. |
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