LANSING — State Rep. Darrin Camilleri (D-Brownstown Township) introduced House Bill 5529 today to increase the state’s Earned Income Tax Credit (EITC) from 6 percent to 30 percent of the federal EITC. The EITC is a refundable tax credit that takes into account a family’s income, marital status and number of dependents.
“The earned income tax credit has been a successful tool for lifting families, and especially children, out of poverty and has helped working people get ahead,” Camilleri said. “This bill builds on that success by enabling families to put more of their paycheck toward basic necessities that allow them to keep working. And we’re not just talking about a few dollars — this bill would reimburse families with hundreds or even thousands of dollars more per year to spend on things that really make a difference in their lives, such as child care or transportation.”
Michigan is one of 28 states and the District of Columbia that has a state-level EITC, however it offers the fourth-lowest percentage of the federal EITC from among that list. California, New Jersey, Connecticut, Vermont, New York, South Carolina, and D.C. have EITC rates at or above 30 percent. Research has shown that states with high EITCs provide additional incentives for families to continue working, thereby increasing families’ financial stability and freeing up resources to be used toward child care and other expenses. According to the IRS, every year the federal EITC raises more than 6 million people, half of which are children, above the poverty line.
“Throughout my first term as a legislator, I have been committed to increasing opportunities for our state’s working families, and this bill would help families afford the basics so that they can build a better life,” Camilleri said. “The EITC can be a real game changer for low- and middle-income families, and I believe it should be a part of any discussion around tax reform in Michigan. I urge my colleagues to join me in re-emphasizing this commitment to rebuilding an economy that works for all Michigan residents.”