July 2007

States Make Significant Progress on Earned Income Tax Credit Legislation
Twenty-two states now have state EITCs

The 2007 legislative session has been a successful one for state Earned Income Tax Credit legislation. A number of states have made significant progress on state EITC legislation during the past few weeks.

The following states have signed EITC bills into law:

Louisiana becomes 22nd state to enact state Earned Income Tax Credit
On Friday, July 6, Governor Blanco signed legislation that creates a new 3.5 percent refundable state EITC. Louisiana becomes the first Southern state with a refundable EITC. The credit will benefit 509,000 low- and moderate-income working families.
>Read about the bill in The Daily Advertiser
>Read "A Tax Credit that Works for Louisiana’s Working Families"

Improvements to New Jersey EITC will benefit 300,000 families
Governor Corzine signed legislation that makes significant changes to the state’s EITC. The bill raises the previous $20,000 income threshold to meet federal eligibility standards, makes the credit available to previously-ineligible households without qualifying children and increases the credit from 20 to 25 percent phased in over two years.
>Read about the state budget bill in the Newark Star Ledger

The following states have passed legislation that awaits their Governor’s signature:

Oregon EITC sunset extended until 2014
The Oregon legislature made two changes to its state EITC. The EITC is currently refundable, but the refundability provision was scheduled to sunset in 2011. The legislature made the sunset applicable to the credit itself, not just the refundability provision, and extended the sunset date to January 1, 2014. The Governor is expected to sign the legislation.

Illinois ‘technical fix’ legislation awaits Governor’s signature
The Illinois legislature passed a bill that fixes a quirk unique to the Illinois EITC, which for several years has prevented certain working families, such as some foster parents, from receiving state EITC refunds. The bill has been sent to the Governor, who is expected to sign the legislation. The Illinois legislature also is considering a bill that would expand the EITC from fiveto 10 percent of the federal credit.

The following states are either still considering legislation or were unsuccessful in their efforts this year:

North Carolina legislature close to passing new EITC
The North Carolina legislature is strongly considering a new Earned Income Tax Credit. Several versions of a state EITC are currently being considered. A 3.5 and 5 percent EITC are being discussed as well as a refundable and non-refundable version. The legislative session has been extended to complete budget negotiations.
>Read about the bill in The Fayetteville Observer

Connecticut EITC dropped in final budget negotiations
Advocates are frustrated and disappointed that state budget negotiations ended without an agreement to create a state EITC. The EITC was one of the last items to be dropped from the state budget after intense negotiations between the legislature and the Governor.
>Read a Connecticut Association for Human Services press release in response to the budget deal
>Read about the budget deal in the Hartford Courant

The State EITC Online Resource Center is pleased to present its electronic newsletter on current policy developments around state and federal Earned Income Tax Credits. For more information, please go to: www.stateeitc.com.

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