Pa. House advances bill establishing state earned income tax credit to aid working poor

The Pennsylvania House of Representatives passed legislation that would establish a state Earned income Tax Credit, which if signed into law would have the commonwealth join 33 other states that have already adopted this aid to working families. File/Dan Gleiter | dgleiter@pennlive.comWorking Pennsylvanians may be able to get a state earned-income tax credit under a bill that passed the state House of Representatives on Monday.

“For every dollar spent on the state earned income tax credit by the commonwealth, we will receive $4 back on economic growth and save $3 in social spending,” said Rep. Christina Sappey, D-Chester County, who sponsored the bill. “As a result of increased employment, Pennsylvania may see an annual benefit of over $200 million in personal income tax revenue and a reduction of $475 million in public assistance spending.

The bill, if passed by the Senate and signed by Gov. Josh Shapiro, would provide a state earned income tax credit of 10% of the federal earned income tax credit for this year. That rate would rise every two years, with a limit of 25% of the federal tax credit. Earned income tax credits refund tax dollars to low-to-moderate income working families.

“This will ensure that low to middle income families who are struggling will have additional income,” Sappey said. “This is to give families who are struggling additional resources to avoid that slide to poverty.” A report by United Way of Pennsylvania found that while the total number of households in Pennsylvania increased by 2%, the number of households below theUnited Way of Pennsylvania President Kristin Rotz said at a May news conference there are 1.4 million hard-working Pennsylvanians who are below the ALICE threshold are “going to work every day. They are earning income that is higher than the federal poverty level but they are not able to provide for the basic needs of their families.

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