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New State Tax Credit For Working Poor Paid $601 On Average

By MARA LEE

January 10, 2013

About 13 percent of Connecticut households worked either so little, or at such low-wage work in 2011 that they were eligible for the new state Earned Income Tax Credit.

The average filer's income was $17,957, according to an analysis released Thursday by the fiscal policy center at Connecticut Voices for Children, an anti-poverty nonprofit.

The state helps the working poor by paying them 30 percent of what they can claim on the federal EITC. So the average household gets $2,003 in the federal income tax credit, and $601 from Connecticut.

That supplements their earnings by about 14.5 percent.

For families with three or more children, the Connecticut EITC can be worth up to $1,767, with a federal credit of $5,890. For those families, the support is equal to 40 to 50 percent of their annual income.

The EITC first was passed in the 70s to counteract the regressiveness of payroll taxes, which all workers pay. Connecticut Voices for Children said adding a state tax credit balanced out the recent sales tax increases for the state's poorest workers. People with low incomes spend everything they earn, and so the sales tax hits them hardest.

In 2011, the federal EITC kept 61,000 people in Connecticut above the poverty line, including 35,000 children, according to the analysis.

Workers who earned $50,270 or less in 2012 and were raising children, and single workers without children who earned $13,980 or less may qualify for the credit this year, though it starts phasing out at $17,090.