CT Earned Income Tax Credit Set To Rise: Gov. Lamont

CONNECTICUT — Thousands of low-to-moderate income working individuals and families in the state will receive a larger state tax refund next year due to a rise in the Connecticut Earned Income Tax Credit, Gov. Ned Lamont announced.

The tax credit is scheduled to increase from its most recent rate of 23 percent of the federal credit to 30.5 percent this year.

The rate increase was included as part of the fiscal year 2022-2023 biennial state budget the governor signed into law earlier this summer. It will result in an additional $40 million being delivered to the nearly 195,000 households that are eligible for the tax credit, for a total of $158 million, according to officials.

"Increasing the rate of the Connecticut Earned Income Tax Credit is one of the most impactful provisions in the newly enacted state budget because it will provide direct relief to low-to-moderate income workers who are providing for their families," Lamont said. "Numerous studies have shown that this tax credit is one of the best anti-poverty tools we can use because it encourages work, boosts economic stability, and uplifts generations to come. Ultimately, these tax credits 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. In this time of economic uncertainty for so many, we need to make sure Connecticut’s working families know about this tax credit and file taxes to claim it."

The Connecticut Earned Income Tax Credit is a refundable state income tax credit for low-to-moderate income working individuals and families that mirrors the federal earned income tax credit.

To qualify, filers must have eligible earned income and an adjusted gross income that is less than:

• $51,464 ($57,414 married filing jointly) with 3 or more qualifying children;
• $47,915 ($53,865 married filing jointly) with 2 qualifying children;
• $42,158 ($48,108 married filing jointly) with 1 qualifying child; or
• $15,980 ($21,920 married filing jointly) with no qualifying children.

Lamont credited Senate President Martin Looney (D-New Haven) for advocating for the rate increase and successfully adopting it as part of the budget.

"For years I have fought to make our tax system more progressive and provide relief for workers in Connecticut," Looney said. "The Earned Income Tax Credit was established in 2011 once state government finally had a Democratic governor to work with the Democratic majorities in the General Assembly. While the tax credit fluctuated during tough budget times, this new state budget increases the rate for the first time since enacted, providing for a 32.6 percent increase. I want to thank Governor Lamont and Speaker Ritter for working together on this goal to make today a reality. Combining the increase in the EITC from 23 percent to 30.5 percent of the federal EITC with our incremental increase in the state minimum wage – now $13 per hour and reaching $15 in less than two years – we are sending a clear message to working people in Connecticut that we are committed to making our state more affordable for you and your family."

Lamont and Looney announced the tax credit increase during a news conference Tuesday at Junta for Progressive Action in New Haven to highlight the increasing rate. The nonprofit organization offers no-cost social services, legal services, immigration services, adult education, and youth programs to low-income individuals and families in the Greater New Haven area.

"The Connecticut Earned Income Tax Credit increase will help families have more money in their pockets for medical care, food, and other needs," said Bruni Pizarro, executive director of Junta for Progressive Action. "This is particularly critical as Latinx communities continue to be disproportionately impacted by the COVID-19 pandemic. Many thanks to Governor Lamont and Senator Looney for being champions for working families and the communities we serve."

In 2020, approximately 175,000 households in Connecticut, which included more than 220,000 children and other dependents, benefited from the credit.

Added Connecticut Department of Revenue Services Commissioner Mark Boughton, "The Department of Revenue Services is proud to administer Connecticut’s Earned Income Tax Credit, which puts money back in the pockets of hard-working families. I applaud Governor Lamont and members of the General Assembly for their support of this important state tax benefit, and their investment in working families who continue to sustain Connecticut and contribute to our comeback."

The Connecticut Earned Income Tax Credit was created in 2011 and has had varying rates over the last decade, including 30% in 2011 and 2012, 25 percent in 2013, 27.5 percent from 2014 to 2016, and 23 percent from 2017 to 2020.

At the new 30.5 percent rate, a family with two qualifying children will receive up to $1,824 from the state, compared to $1,362 in 2020 – an extra $462 that families can use.

The newly enacted increase brings Connecticut’s rate higher than the neighboring states of Massachusetts and New York, which are both at 30 percent.