Governor Proposes Increase in CT's Earned Income Tax Credit

Gov. Ned Lamont today is proposing increasing Connecticut’s Earned Income Tax Credit.

The governor said Monday that his budget proposal will include increasing the state’s Earned Income Tax Credit from 30.5% to 40%.

The governor said it will provide an additional $44.6 million in state tax credits to around 211,675 low-income households above the amount they are currently receiving.

“Numerous studies have shown that the EITC is one of the best anti-poverty tools we can use because it encourages work, boosts economic stability, and uplifts generations to come. Ultimately, this tax credit helps improve entire communities because these dollars are being invested right back into our local economy through groceries, transportation, clothing, rent, utilities, and other necessary expenses. The EITC encourages work and boosts economic stability, and I think it’s about time that we increase it,” Lamont said in a statement.

The governor said the Connecticut EITC is a refundable state income tax credit for low-income working individuals and families that mirrors the federal EITC.

The federal income eligibility requirements for 2022 are:

• No dependents: $16,480 for individuals and $22,610 for married filing jointly
• One dependent: $43,492 for individuals and $49,622 for married filing jointly
• Two dependents: $49,399 for individuals and $55,529 for married filing jointly
• Three dependents: $53,057 for individuals and $59,187 for married filing jointly

The governor’s office said the amount of each household’s credit is need-tested and depends on the size of its federal credit.

He said under the current rate of 30.5%, a married family with two qualifying children receives a state tax credit of up to $1,880. If the rate was 40%, that same family would receive a state tax credit of up to $2,465.

The Connecticut EITC was created in 2011. Following are the rates over the last decade:

• 2011: 30%
• 2012: 30%
• 2013: 25%
• 2014: 27.5%
• 2015: 27.5%
• 2016: 27.5%
• 2017: 23%
• 2018: 23%
• 2019: 23%
• 2020: 23%
• 2021: 30.5%
• 2022: 30.5%

The governor will deliver his annual budget address to the General Assembly on Wednesday, Feb. 8 at noon.