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| John Nevitt Senior Manager, Family Stability |
A group of leaders
across Kentucky have been working for the past few years to develop legislation
that would allow our state to join 25 other states that have already adopted
a State Earned Income Tax Credit (EITC), modeled after the federal credit.
So, what is a state EITC and why is it important?
The federal Earned Income Tax Credit helps low-to-moderate income working families offset their income taxes so they have more money to meet their basic needs and support positive outcomes for their children. A state EITC provides an additional credit at a percentage of the federal level to make an even greater difference for families. This is particularly helpful in light of the rising cost of healthcare, transportation, and utilities.
In the 2012 tax year, the federal EITC paid over $917 million to nearly 400,000 families in Kentucky, with the average credit about $2,300 per family. If a state credit were in place at 15% of the federal credit, this would represent an additional $138 million going back to hard working families across our state, at an average of $345 per family.
So, what is a state EITC and why is it important?
The federal Earned Income Tax Credit helps low-to-moderate income working families offset their income taxes so they have more money to meet their basic needs and support positive outcomes for their children. A state EITC provides an additional credit at a percentage of the federal level to make an even greater difference for families. This is particularly helpful in light of the rising cost of healthcare, transportation, and utilities.
In the 2012 tax year, the federal EITC paid over $917 million to nearly 400,000 families in Kentucky, with the average credit about $2,300 per family. If a state credit were in place at 15% of the federal credit, this would represent an additional $138 million going back to hard working families across our state, at an average of $345 per family.
So, how exactly does this credit help families?
