42°
Gov. Ned Lamont announced that the Connecticut Earned Income Tax Credit is scheduled to increase from 23 percent of the federal credit to 30.5 percent this year.
In total, the new budget will result in an additional $40 million being delivered to the nearly 195,000 households that are eligible for the tax credit, for a total of $158 million.
The Connecticut Earned Income Tax credit was created in 2011. The new increase brings Connecticut’s rate higher than the neighboring states of Massachusetts and New York, which are both at 30 percent.
Since its creation, the Connecticut Earned Income Tax Credit has had varying rates, from 30 percent in 2011 and 2012, 25 percent in 2013, 27.5 percent from 2014 to 2016, and 23 percent from 2017 to 2020.
“For years I have fought to make our tax system more progressive and provide relief for workers in Connecticut,” Senate President Martin Looney said. “The Earned Income Tax Credit was established in 2011 once state government finally had a Democratic governor to work with the Democratic majorities in the General Assembly.
“While the tax credit fluctuated during tough budget times, this new state budget increases the rate for the first time since enacted, providing for a 32.6% increase.”
To qualify, filers must have eligible earned income and an adjusted gross income that is less than:
- $51,464 ($57,414 married filing jointly) with 3 or more qualifying children;
- $47,915 ($53,865 married filing jointly) with 2 qualifying children;
- $42,158 ($48,108 married filing jointly) with 1 qualifying child; or
- $15,980 ($21,920 married filing jointly) with no qualifying children.
At the new 30.5 percent rate, a family with two qualifying children will receive up to $1,824 from the state, compared to $1,362 in 2020.
“Increasing the rate of the Connecticut Earned Income Tax Credit is one of the most impactful provisions in the newly enacted state budget because it will provide direct relief to low-to-moderate income workers who are providing for their families,” Lamont said in announcing the new figures.
“Numerous studies have shown that this tax credit is one of the best anti-poverty tools we can use because it encourages work, boosts economic stability, and uplifts generations to come.
In 2020, approximately 175,000 households in Connecticut, which included more than 220,000 children and other dependents, benefited from the credit.
“Ultimately, these tax credits improve entire communities because these dollars are being invested right back into our local economy through groceries, transportation, clothing, rent, utilities, and other necessary expenses,” Lamont added.
“In this time of economic uncertainty for so many, we need to make sure Connecticut’s working families know about this tax credit and file taxes to claim it.”
Click here to follow Daily Voice Bridgeport and receive free news updates.
