HARTFORD, Conn. (WTNH) – Nearly 200,000 low-to-moderate income working individuals and families in Connecticut will now receive a significant boost in state income tax credits. This comes as Governor Ned Lamont announced on Wednesday he is directing the Department of Revenue Services to retroactively enhance the 2020 Connecticut Earned Income Tax Credit from 23 percent of the federal credit to 41.5 percent.
The additional state tax refund will provide support to low-to-moderate income working individuals and families. The enhancement is set to benedit 198,708 household that earned up to $56,844 in 2020 and filed for that year’s EITC.
According to the state, the amount of each household’s enhanced credit is need-tested and depends on the size of its federal credit.
The cost of the enhanced credit will be covered by the final portion of the state’s $1.38 billion Coronavirus Relief Fund.
“Enhancing the 2020 Connecticut Earned Income Tax Credit provides direct relief to workers doing their best to provide for their families while confronting pandemic-related costs from masks and tests to childcare and internet access,” Governor Lamont said. “The recent bipartisan budget increased this credit going forward because numerous studies show it’s one of the best anti-poverty tools we have. The EITC encourages work, boosts economic stability, and uplifts generations to come. Ultimately, these tax credits improve entire communities because these dollars are being invested right back into our local economy. I thank Connecticut’s outstanding Congressional delegation and our partners in the U.S. Treasury Department for giving us the tools we need to enhance last year’s credit in this time of economic uncertainty for so many.”
The DRS plans to issue checks for the additional credit to eligible households before the end of February. The EITC was created in 2011 and has had varying rates over the last 20 years.