LANSING, Mich. — State Sen. John Damoose on Thursday voted in favor of legislation to increase the state’s Earned Income Tax Credit and provide additional relief to Michigan families who are struggling with rising costs.
“The cost of living has risen sharply, and countless people are falling behind,” said Damoose, R-Harbor Springs. “Getting assistance to those who need it most is and will continue to be a priority. While this bill isn’t my first choice of action, it’s a solid foundation that will allow us to get help to families in need and continue discussions on how we can reach even more people.”
Senate Bill 3 would increase the state’s EITC from 6% to 30% of the federal EITC beginning with the 2022 tax year. Taxpayers would not actually claim the extra 24% for the 2022 tax year on their tax returns. Instead, for the 2022 tax year, the state would figure the amount owed to the taxpayer that is above the current 6% and provide that credit as a tax refund.
Currently, a family of four with earned income of $37,500 could claim $200 in EITC at the existing 6% rate. Under SB 3, which would increase the rate to 30%, that same family could claim $999 in EITC.
The EITC only goes to those who are currently working and is phased out at higher incomes.
“This credit has been especially helpful for families in Northern Michigan and the Upper Peninsula,” Damoose said. “I am proud to have voted to expand it and help get more money back into people’s pockets. I hope we can use this as a building block to continue conversations and get more tax dollars back to the people who sent them to Lansing in the first place.”