Sappey bill implementing state-level earned income tax credit advances

HARRISBURG, June 14 – Rep. Christina Sappey, D-Chester, is applauding the passage of H.B. 1272, bi-partisan legislation crafted in partnership with the United Way of PA, that would implement a state-level Earned Income Tax Credit for low-income working households.

“A state earned income tax credit is a smart investment in our workforce and the return on this investment is substantial to the commonwealth,” Sappey said. “These are members of our workforce who do not meet eligibility for social safety net programs, but are often on the verge of not being able to pay the rent on time or meet other financial obligations, particularly when an unexpected expense like a car repair or medical expense arises.”

The United Way of PA calls households in the category asset limited income constrained employed, or ALICE. These Pennsylvanians meet the requirements for the federal EITC, which H.B. 1272 mirrors.

Sappey noted that, for every $1 spent on a state EITC by the commonwealth, Pennsylvania would receive $4 back in economic growth and save $3 in social spending. The annual economic benefits of a refundable state EITC of 25% of the federal EITC amount to at least $1.2 billion at a cost of $366 million per year.

“Enactment of a state Earned Income Tax Credit will ensure working middle-to-low-income families, that are currently struggling, have additional resources to avoid the slide into poverty,” Sappey said. “These folks go on to further their education and training, and increase their earning power. Our employers also need workers to stay on the job. We can support those who are doing everything right by establishing a state Earned Income Tax Credit.”

H.B. 1272 passed the House with bipartisan support and will now head to the Senate for consideration.