Sophie Sonnenfeld Photo
Gov. Ned Lamont Tuesday with Junta staff and, at left, State Rep. Al Paolillo.
Guess who’s getting a bigger tax break in Connecticut?
The answer: low to moderate-income working individuals and families.
The governor brought that message Tuesday to Junta for Progressive Action on Grand Avenue. He held a press conference to highlight the expansion of the Earned Income Tax Credit (EITC), which sends refunds to taxpayers below certain income thresholds.
Lamont: “Something to live on.”
Connecticut’s EITC has increased by 32.6 percent, from 23 percent to 30.5 percent of the federal EITC.
“It’s a tax cut for working families and middle-class families who are paying enough and makes this state just a little more affordable,” Lamont said.
Department of Revenue Services Commissioner Mark Boughton said that the now $40 million program will reach 220,000 taxpayers and their dependents in the state this year.
“This is a tremendous investment in families in the state at a time when they can really use it,” Boughton said.
Mark Boughton: A “tremendous investment in families in the state at a time when they can really use it.”
The program has graduated levels of refunds based on income. When Connecticut residents file their taxes, they can check off if they’re eligible. To qualify, a resident’s earned income must be less than $50,954 ($56,844 married filing jointly) with three or more qualifying children, $47,440 ($53,330 married filing jointly) with two qualifying children, $41,756 ($47,646 married filing jointly) with one qualifying child, or $15,820 ($21,710 married filing jointly) with no qualifying children.
Depending on the number of children, in 2020 a resident could get back between $124 and $1,532 max from the state EITC. With the new boost that amount will grow.
Lamont said the tax credit roughly represents an extra $500 a year for those who qualify, “to help take care of that kid, help take care of basic utility needs. Something to live on.”
Mayor Justin Elicker shared statistics from a Connecticut State Department of Revenue Services study in 2014.
Mayor Justin Elicker thanks Junta for their work in New Haven.
Elicker said the study showed that the lowest income earners in Connecticut paid 23.6 percent of their income to state and local taxes while middle-class earners paid 13 percent, and the top ten percent of earners paid 10 percent of their income. “That in my view is wrong. This is a strong step to help correct that,” he said. Some Democrats in the legislature have pointed to that study (not updated since 2014) to argue for raising marginal tax rates on the wealthiest taxpayers. Gov. Lamont has rejected that argument, arguing it would “punish success” to increase tax rates on the wealthy.
New Haven State Sen. Martin Looney reviewed the history of the EITC in Connecticut, which was instituted in 2011. The EITC was first proposed in Connecticut in 2000. Looney fought for its passage, then helped lead the fight to increase it.
State Sen. Matin Looney: “It is targeted to try to empower working people.”
“It is targeted to try to empower working people. Every dollar that is received through the EITC, both federal and state, comes back into the economy because people at that level of income to qualify for it are not people who are in a position to set aside a significant portion of their incomes in savings. They are living marginally and they have to meet daily expenses and it’s often a struggle,” said Looney.
“The increase will help families have more money in their pockets for medical care, food, and other needs. This is particularly critical as the Latinx community continues to be disproportionately impacted by the Covid-19 pandemic,” said Junta Executive Director Brunilda Pizarro.
Yaniel Ramos has been working as an intern with Junta for a month.
“A lot of the people we see are in extreme need, and anything that can help in any way is necessary at this point,” Ramos said.
Watch the full press conference here.