The Indiana House unanimously passed legislation Monday to increase the state’s earned income tax credit for Hoosiers.
The measure, House Bill 1290, increases Indiana earned income tax credit (EITC) by more than a hundred dollars in some situations. It also ties the state credit with the federal one more closely.
This means that married couples filing jointly will have a higher income eligibility threshold. Additionally, taxpayers with three or more dependents are now entitled to a larger credit.
Indiana Earned Income Tax Credit
Indiana EITC is a state tax benefit available to taxpayers with lower incomes. If HB 1290 becomes law, the table displays the income eligibility amounts for the 2023 tax year and the maximum credit available.
The measure substantially modifies the state-earned income tax credit, making it difficult to compare it to the existing benefit. Representative Chuck Goodrich R-Noblesville characterized his bill as simple.
Goodrich stated, However, it makes an enormous impact on over half a million Indiana Hoosier families. Representative Cherrish Pryor (D-Indianapolis) characterized the tax credit as a safety net.
One of the best ways we have in this country to bring people out of poverty by ourselves, Pryor remarked. The Senate will now consider the bill.
Read more: Tax refund update: Is your inflation relief check taxable?
How EITC May Affect You?
On January 27, the Internal Revenue Service and community organizations across the nation celebrate EITC awareness by disseminating information about how some qualifying low-to-moderate income families may get a tax credit or refund of up to $6,935.
This year’s earned income credit awareness day is the seventeenth annual media campaign aiming to inform more individuals about the EITC and how to qualify.
The fact that millions of workers will be eligible for the EITC for the first time this year, according to the IRS, underscores the need of raising awareness.
Many persons who may be qualified for the EITC, also known as the earned income credit (EIC), are unaware of the credit or do not know how to claim it.
Veterans, low-to-moderate income households without children, individuals with impairments, and people living in atypical houses are at risk of overlooking the credit, according to the IRS.
Awareness is particularly crucial because many employees’ eligibility for the earned income credit fluctuates annually owing to life events such as job loss, divorce, becoming a parent, and marriage.
The IRS estimates that 31 million qualified workers and families received around $64 billion in earned income credits last year. The typical earned income credit obtained was little more than $2,000.
Read more: Social Security payments: Here’s when you can expect your February check!
