As tax season starts, Maryland residents are keeping a close eye on potential changes to the state’s tax laws. One key area of interest is the Earned Income Tax Credit (EITC) and State Child Tax Credit, which could be extended and expanded to benefit more working families.
EITC and State Child Tax Credit could be expanded and extended. (Photo: Economic Times)
EITC and State Child Tax Credit in Maryland
The EITC is a federal tax credit designed to assist low-income working families. In Maryland, the state also offers its own version of the EITC, known as the State Earned Income Tax Credit (SEITC). The SEITC provides eligible taxpayers with a credit based on a percentage of their federal EITC.
Similarly, the State Child Tax Credit provides eligible taxpayers with a credit for each dependent child under the age of 18. The credit is currently set at $100 per child, but there are efforts to expand this credit as well, according to a published article in The Center Square.
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Expansion of EITC and State Child Tax Credit
Governor Wes Moore recently proposed expanding the EITC and State Child Tax Credit to provide greater relief for low-income working families. The proposal includes increasing the SEITC to 100% of the federal credit, up from the current 28%, and doubling the State Child Tax Credit from $100 to $200 per child.
These changes could have a significant impact on the financial well-being of many Maryland families. According to a report from the Maryland Center on Economic Policy, over 400,000 Maryland households could benefit from the expansion of the EITC and State Child Tax Credit.
In addition to providing much-needed financial relief, the expansion of these credits could also have broader economic benefits. By putting more money into the pockets of low-income families, they may be better able to afford basic necessities and stimulate local economies.
However, the proposed changes are not yet set in stone. The Maryland General Assembly will need to approve the expansion of the EITC and State Child Tax Credit as part of the state’s budget process. Advocates for these changes are urging lawmakers to act quickly, as many families are struggling to make ends meet in the wake of the COVID-19 pandemic.
