A state Earned Income Tax Credit is gaining momentum!

A state Earned Income Tax Credit is gaining momentum! During last week's lobby day, members made sure that every legislator got customized information (thank you KCEP!) about how a state EITC would impact the people in their district. Most of this information was part of a larger conversation about the EITC's role within comprehensive tax reform like the Kentucky Forward Plan, and the opportunity in pairing an Earned Income Tax Credit with increasing the minimum wage in Kentucky.

The EITC is a tax credit for low- and moderate-income working families. The federal EITC has been in place since 1975, and 26 other states – including three of Kentucky's neighbors – have adopted a state EITC because it works really well. The Kentucky Forward Plan calls for a Kentucky EITC that is 15% of the federal credit. There's an additional bill in the Senate that calls for a 10% EITC.

KCEP has put together an interactive map that shows how impactful an EITC would be for each county. Take a look and share it out!

Kentuckians deserve the opportunity to lift themselves out of poverty.

The EITC is designed to help people afford to work by offsetting the rising costs of child care, transportation, and utilities that working families need. Families get it by filing their taxes, so it comes when heating costs are the highest and "extra" work opportunities – seasonal jobs, outdoor labor, etc. – are often the lowest. The EITC fills a gap to keep families stable and able to work. 

The size of the EITC is based on income and family status. Once a taxpayer’s income reaches a certain amount, the credit reaches its peak, after which it begins to phase out. The credit phases out at about $47,000 for families with three or more children.

More than 400,000 Kentucky families would benefit directly from a refundable state EITC, and we'd all benefit from more Kentucky families with more economic stability. The EITC is als0 associated with healthier babies, improved educational outcomes for children, and higher rates of employment and earnings later in life.

This is a great time to put in a call to House and Senate Leadership, as well as your legislators, in support of the EITC. Here's a suggested message, using the data from the map linked to above: "Please support a robust Earned Income Tax Credit for Kentucky's working families! A 15% EITC would directly benefit X percentage of X Countians, and would bring X dollars into X County."

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