Issue Spotlight: Two Critical Tax Credits for Working Families in Jeopardy
Congress may soon act on a long-term deficit reduction plan that could mean deep cuts to tax credits for working families — including the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). The budget passed by the U.S. House in March 2013 would let improvements to the EITC and CTC enacted in 2009 expire and requires billions in new spending cuts that Congress would likely take from the refundable portion of the tax credits.
The Pennsylvania House recently approved a variety of amendments to House Bill 377, which will have a significant impact on state government revenues over the next few years. View a table detailing the impact.
A bill to establish a Pennsylvania Earned Income Credit (EIC) is scheduled for a vote in the Pennsylvania House this week. House Bill 377 would create a state EIC set at 15% of the federal Earned Income Tax Credit beginning in Tax Year 2008 and 30% of the federal credit beginning in Tax Year 2009 and beyond.