Legislation filed to reinstate the earned income tax credit
When state legislators eliminated the refundability of the state earned income tax credit (EITC) in 2016, more than 200,000 low-to-moderate income families lost an important tool to make ends meet. Sen. George Young, D-Oklahoma City, wants to reinstate the refundability of the state EITC, which serves as an essential tax benefit for working families across Oklahoma.
Senate Bill 1161 aims to restore the refundability of the state EITC to 5 percent, meaning if the amount families receive from the EITC is more than the amount of state income tax they owe, they would collect the difference as a refund.
“When the earned income tax credit was eliminated in 2016, it negatively impacted more than 5,000 families in my district,” Young said. “This credit is designed to encourage work and decrease poverty in our communities, and it allows low-income workers to avoid paying a disproportionate percentage of their income in taxes. Reinstating this tax credit is an easy way we can help Oklahomans take care of their families.”
When the EITC refundability was cut, Oklahomans relying on the credit refund lost nearly $28 million – an average of $121 per household. This is money families typically spend on basic needs like food, gas and health care, Young said.
Eliminating EITC refundability is also cited to have negative effects on our communities and local economy. Studies by the National Conference of State Legislatures (NCSL) show each EITC dollar refunded to families generates between $1.50 to $2 for the local economy from purchases that support local businesses and create tax revenue.
“When working families don’t have enough money to make ends meet, our economy suffers, and we all lose,” Young said. “Now that we have stabilized our budget, it is imperative we restore the refundability of the earned income tax credit. Our Oklahoma workers and their families deserve it.”
For more information, contact:
Sen. George Young at 405-521-5531, or email George.email@example.com.