PENNSYLVANIA — A new bipartisan piece of legislation, H.B. 1272, has been passed this week by Pennsylvania’s House of Representatives, which aims to provide a state-level Earned Income Tax Credit for low-income working households who meet the requirements for the federal EITC. The new tax credit will help working individuals avoid the slide into poverty and further their education and training, while also saving the state up to $3 in social spending and promoting economic growth.
“A state earned income tax credit is a smart investment in our workforce and the return on this investment is substantial to the commonwealth,” said Rep. Christina Sappey, D-Chester. “These are members of our workforce who do not meet eligibility for social safety net programs, but are often on the verge of not being able to pay the rent on time or meet other financial obligations, particularly when an unexpected expense like a car repair or medical expense arises.”
The United Way of PA calls households in the category asset limited income constrained employed, or ALICE. These Pennsylvanians meet the requirements for the federal EITC, which H.B. 1272 mirrors.
Sappey noted that, for every $1 spent on a state EITC by the commonwealth, Pennsylvania would receive $4 back in economic growth and save $3 in social spending. The annual economic benefits of a refundable state EITC of 25% of the federal EITC amount to at least $1.2 billion at a cost of $366 million per year.
“Enactment of a state Earned Income Tax Credit will ensure working middle-to-low-income families, that are currently struggling, have additional resources to avoid the slide into poverty,” Sappey said. “These folks go on to further their education and training, and increase their earning power. Our employers also need workers to stay on the job. We can support those who are doing everything right by establishing a state Earned Income Tax Credit.”
H.B. 1272 passed the House with bipartisan support and will now head to the Senate for consideration.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.