EITC expansion not quite complete

One more important step to go to complete the historic expansion of the state’s Earned Income Tax Credit. Starting with the 2022 tax year the state match for the federal credit is now 30 percent up from six percent. A huge win for Michigan’s working families!

Expanding Michigan’s EITC from six to 30 percent provides more than 730,000 households raising nearly one million children an extra almost $400 million to pay the bills year after year after year. An average of an extra $600 for each household.

But the additional 24 percent from the 2022 tax filing will not be paid to recipients until around March 2024 if the EITC expansion is not given immediate effect. If the EITC expansion is given immediate effect the additional 24 percent will be paid to recipients around June 2023.

The reason why this historic expansion of what will now be called the Working Families Tax Credit is not already in effect, is that the expansion was passed as part of an omnibus tax and spend bill that was far less popular than the EITC expansion. The omnibus bill did not win immediate effect because of opposition to other components of the legislation.

There is an easy fix that should be accomplished quickly: legislative passage and the Governor’s signature of a bill that gives the EITC expansion immediate effect.

The EITC is pro work and an incentive to go back to work. It is good for both workers and employers. Michigan’s low-wage workers need help paying the bills now. Michigan employers having trouble finding enough workers to operate and expand their enterprises also need help now. Immediate expansion of the state’s EITC is the best way of accomplishing both.

Candidates from both parties campaigned on helping working Michigan families deal with high inflation. In the campaign they understood Michiganders needed help now paying for necessities like food and gas. A big expansion of the EITC now is the best way for policymakers in both parties to deliver on that campaign pledge. What no one campaigned on is that you will have to wait until 2024 to get state help.

The expansion to a 30% state match won huge bipartisan support in both houses of the Michigan legislature as well as support from more than two hundred organizations from across the state. An unprecedented cross-sector, cross-ideology coalition.

There is no acceptable excuse for not giving immediate effective now to the big expansion of Michigan’s Working Families Tax Credit.

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